The following information is from the December 31,2018 balance sheet of January Corporation. $$\begin{array} { | l | r | }
\hline \text { Preferred Stock, } \$ 100 \text { par } & \$ 270,000 \
\hline \text { Paid-In Capital in Excess of Par-Preferred } & 22,000 \
\hline \text { Common Stock, } \$ 1 \text { par } & 69,000 \
\hline \text { Paid-In Capital in Excess of Par-Common } & 206,000 \
\hline \text { Retained Earnings } & \underline { 56,600 } \
\hline \text { Total Stockholders' Equity } & \$ 623,600 \
\hline
\end{array}$$ What is the average issue price of the preferred stock shares? (Round answers to the nearest dollar.)
A) $108
B) $100
C) $167
D) $106

Question

The following information is from the December 31,2018 balance sheet of January Corporation. $$\begin{array} { | l | r | } 
\hline \text { Preferred Stock, } \$ 100 \text { par } & \$ 270,000 \
\hline \text { Paid-In Capital in Excess of Par-Preferred } & 22,000 \
\hline \text { Common Stock, } \$ 1 \text { par } & 69,000 \
\hline \text { Paid-In Capital in Excess of Par-Common } & 206,000 \
\hline \text { Retained Earnings } & \underline { 56,600 } \
\hline \text { Total Stockholders' Equity } & \$ 623,600 \
\hline
\end{array}$$ What is the average issue price of the preferred stock shares? (Round answers to the nearest dollar.)
A) $108
B) $100
C) $167
D) $106

Quizplus · Accepted Answer

The average issue price of the preferred stock shares is $108. 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 $22,000 and the number of preferred stock shares outstanding is 2,700 (270,000/100). Therefore, the average issue price of the preferred stock shares is $22,000/2,700 = $108.

The Following Information Is from the December 31,2018 Balance Sheet