Question

SARASOTA CORP. Balance Sheet (partial) Stockholders’ equity Paid-in capital

Preferred stock, cumulative, 10,900 shares authorized, 6,500 shares issued and outstanding $ 663,000
Common stock, no par, 734,000 shares authorized, 564,000 shares issued 1,692,000
Total paid-in capital 2,355,000
Retained earnings 1,180,000
Total paid-in capital and retained earnings 3,535,000
Less:
Treasury stock (7,800 common shares) 41,600
Total stockholders’ equity $3,493,400

(a) How many shares of common stock are outstanding?(b) Assuming there is a stated value, what is the stated value of the common stock?(c) What is the par value of the preferred stock?

Answer 1

Answer:

a. The Shares of common stock outstanding are 556,200

b. The stated value of the common stock is 3

c. The par value of the preferred stock is 102

Explanation:

a. In order to calculate the Shares of common stock outstanding we would have to make the following calculation:

Shares of common stock outstanding=shares authorized-common shares

                                                =564,000-7,800

                                                              =556,200

b. In order to calculate the Stated value of the common stock we would have to make the following calculation:  

Stated value of the common stock= shares issued/shares authorized                                       =1692000/564000

=3

c. In order to calculate the Par value of the preferred stock we would have to make the following calculation:      

Par value of the preferred stock= shares issued and outstanding/6,500

                                                     =663000/6500

                                                     =102