Benjamin Corporation held the following short-term investments in equity securities classified as trading securities:

The valuation account is a net credit of $8,000 at the end of 2011. What was the original cost per share of the C common stock?

Question

Benjamin Corporation held the following short-term investments in equity securities classified as trading securities:

The valuation account is a net credit of $8,000 at the end of 2011. What was the original cost per share of the C common stock?

Quizplus · Accepted Answer

To find the cost per share of the C common stock, we need to use the following formula:
Cost per share = (Original cost - Valuation account balance) / Number of shares
We are given the following information:
Valuation account balance = $8,000 (net credit)
Number of shares = 500
Using the formula, we get:
Cost per share = ($20,000 - $8,000) / 500 = $24
Therefore, the original cost per share of the C common stock was $24. The only answer option that is closest to this value is D ($36).

Benjamin Corporation Held the Following Short-Term Investments in Equity Securities