a. Outstanding shares of common stock is 574,000 shares
b. The stated value of the common stock is $5 per share
a. The number of shares of common stock outstanding can be calculated by subtracting the treasury stock from the issued common stock.
Outstanding shares of common stock:
= Issued common stock - Treasury stock
= 580,000 shares issued - 6,000 shares treasury stock
= 574,000 shares outstanding
b. The stated value of the common stock will be derived by dividing the total paid-in capital for common stock by the number of shares issued.
Stated value per share = Total paid-in capital for common stock / Number of shares issued
= $2,900,000 / 580,000 shares
= $5 per share.
The full question to this is:
Paid-in capital
Preferred stock, cumulative, 10,000 shares authorized, 6,000 shares issued and outstanding $600,000
Common stock, no par, 750,000 shares authorized, 580,000 shares issued 2,900,000
Total paid-in capital 3,500,000
Retained earnings 1,158,000
Total paid-in capital and retained earnings 4,658,000
Less: Treasury stock (6,000 common shares) 32,000
Total Stockholders' Equity $4,626,000
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?