Question

A firm has $1,720,000 in its common stock account and $17,200,000 in its paid-in capital account. The firm issued 430,000 shares of common stock. What is the par value of the common stock?

Multiple Choice

A. $44 per share
B. $40 per share

Answer 1

The par value of the common stock issued by the firm is $4 per share, calculated by dividing the common stock account value by the number of shares issued.

Step-by-step explanation:

The question pertains to the calculation of the par value of common stock issued by a firm.

To find the par value per share, we take the total value in the common stock account and divide it by the number of shares issued.

The firm has $1,720,000 in its common stock account and has issued 430,000 shares.

Thus, the par value per share is calculated as $1,720,000 divided by 430,000 shares, which equals $4 per share.