A company reports the following stockholders' equity:Paid-in Capital:?Common stock, $2 par, 5,000,000 shares authorized$3,000,000Paid-in capital in excess of par, Common stock ……………….1,300,000Total paid-in capital ……………………………………………$4,300,000Retained earnings ……………………………………………1,400,000Total stockholders' equity ……………………………………$5,700,000Compute the (1) number of common shares outstanding and (2) book value per common share.
What will be an ideal response?
(1) Number of common shares outstanding = $3,000,000/$2 = 1,500,000 shares
(2) Book value per common share = $5,700,000/1,500,000 shares = $3.80
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