The Stockholders' Equity section of the balance sheet of Sea Turtle Company reveals the following information: There have been two issues of stock since the corporation began business.The average issue price per share of stock was

Question

The Stockholders' Equity section of the balance sheet of Sea Turtle Company reveals the following information:  There have been two issues of stock since the corporation began business.The average issue price per share of stock was

Quizplus · Accepted Answer

Since we are not given the actual issue prices for each of the two issues, we need to use the average issue price to determine the total number of shares outstanding. We can calculate this by dividing the total common stock amount by the average issue price per share:

Total common stock = $200,000
Total number of shares outstanding = $200,000 / (average issue price per share)

If we assume that the par value of the common stock is $1.00 per share, we can also determine the number of shares issued by dividing the common stock amount by the par value:

Number of shares issued = $200,000 / $1.00 = 200,000 shares

Now we can solve for the average issue price per share:

Average issue price per share = Total common stock / Number of shares outstanding
= $200,000 / 200,000 shares
= $20.00 per share

Therefore, the best choice is C) $20.00.

The Stockholders' Equity Section of the Balance Sheet of Sea