Question

Initial sale price of common stock ​ Hudson-Perry Recordings Inc has one issue of preferred stock and one issue of common stock outstanding. Given their​ stockholders' equity account that​ follows, determine the original price per share at which the firm sold its single issue of common stock.Shareholer's equity (in $000)Preferred stock 225Common stock ($0.1 par, 1,400,000 shares outstanding) 140Paid in capital in excess of par on common stock 19,460Retained earning 1,800Total 21,625

Answer 1

,Answer:

The common stock were issued at $14

Explanation:

the price at which a common was sold will be the sum of the common stock and the paid-in Capital in excess of Par Value accounts.

140 + 19,460 = 19,600

This are thousands so the total proceeds from common stock is:

19,600 x 1,000 = 19,600,000 dollars

now we divide by the shares issued:

19,600,000 dollars / 1,400,000 shares= 14 dollars each share.

Answer 2

Answer:

Original price per share - $14

Explanation:

Information:

• Common stock value = $140,000
• Paid-in capital in excess of par on common stock = $19,460,000
• Number of shares issued = 1,400,000 shares

Original issue price = (Common stock value + Paid-in capital in excess of par on common stock) / Number of shares issued

Original issue price = (140,000+19,460,000) / 1,400,000

Original issue price = $14 / share