Question

below is the equity section of the balance sheet of bottle inc. as of december 31, 2014: common stock, $12 par value $2,280,000 paid-in capital in excess of par 1,330,000 the company only has one class of common stock and no preferred stock. what was the price of the common stock when it was first issued?

Answer 1

Answer:

The price of the common stock when it was first issued was $19 per share

Explanation:

Price at which the stock is issued is consists of Par value and add-in-capital in excess value. It is recorded in different accounts and reported as separately on the balance sheet.

Common Stock at par value of $12 = $2,280,000

Number of outstanding shares = 2,280,000 / 12 = 190,000 shares

Paid-in-Capital in Excess = $1,330,000 / 190,000 = $7 per share

As we know

Price of share = Par value + Paid in capital in excess

Price of share = $12 + $7 = $19 per share