The following information is from the balance sheet of Jackson Corporation as of December 31, 2015. $$\begin{array} { | l | r | }
\hline \text { Preferred Stock, } \$ 100 \text { par } & \$ 200,000 \
\hline \text { Paid-in Capital in Excess of Par-Preferred } & 14,000 \
\hline \text { Common Stock, } \$ 1 \text { par } & 68,000 \
\hline \text { Paid-in Capital in Excess of Par-Common } & 203,000 \
\hline \text { Retained Earnings } & \underline { 52,600 } \
\hline \text { Total Stockholders' Equity } & \$ 537,600 \
\hline
\end{array}$$ What is the average issue price of the preferred stock shares?

Question

The following information is from the balance sheet of Jackson Corporation as of December 31, 2015. $$\begin{array} { | l | r | } 
\hline \text { Preferred Stock, } \$ 100 \text { par } & \$ 200,000 \
\hline \text { Paid-in Capital in Excess of Par-Preferred } & 14,000 \
\hline \text { Common Stock, } \$ 1 \text { par } & 68,000 \
\hline \text { Paid-in Capital in Excess of Par-Common } & 203,000 \
\hline \text { Retained Earnings } & \underline { 52,600 } \
\hline \text { Total Stockholders' Equity } & \$ 537,600 \
\hline
\end{array}$$ What is the average issue price of the preferred stock shares?

Quizplus · Accepted Answer

The average issue price of the preferred stock shares is $107. This is calculated by dividing the total paid-in capital in excess of par for the preferred stock by the number of preferred stock shares outstanding. In this case, the total paid-in capital in excess of par for the preferred stock is $14,000 and the number of preferred stock shares outstanding is 2,000 (200,000 / 100). Therefore, the average issue price of the preferred stock shares is $14,000 / 2,000 = $107.

The Following Information Is from the Balance Sheet of Jackson