Question

RCS, Inc. Gross fixed assets 284,950 Inventory 136,500 Accrued expenses 11,850 Accumulated depreciation 82,310 Notes payable 32,570 Preferred stock 8,000 Retained earnings 89,280 Current portion of L-T debt 4,080 Long-term debt 134,300 Accounts receivable 105,770 Additional paid-in capital 71,600 Accounts payable 50830 Common stock ($0.20 par) 60,000 Cash 17,600 Referring to the above balance sheet accounts for RCS, Inc. for the year ending Dec 31, 2016, the number of common shares issued by the company is closest to:_____.

a. 658,000
b. 12,000
c. 300,000
d. 26,320

Answer 1

The correct option is c. 300,000.

Step-by-step explanation:

The number of common shares issued by the company can be calculated as follows:

Common stock each at par =$0.20

Common stock total value at par = $60,000

Number of common shares issued = Common stock total value at par / Common stock each at par = $60,000 / $0.20 = 300,000

Therefore, the number of common shares issued by the company is closest to: c. 300,000.