ACC 206

3. Analysis of stockholders’ equity 

Star Corporation issued both common and preferred stock during 19X6. The stockholders’ equity sections of the company’s balance sheets at the end of 19X6 and 19X5 follow.



19X6 19X5 

Preferred stock, $100 par value, 10% $580,000 $500,000 

Common stock, $10 par value 2,350,000 1,750,000


Paid-in capital in excess of par value

Preferred 24,000 — 

Common 4,620,000 3,600,000

Retained earnings 8,470,000 6,920,000

Total stockholders’ equity $16,044,000 $12,770,000 


a. Compute the number of preferred shares that were issued during 19X6. 

b. Calculate the average issue price of the common stock sold in 19X6. 

c. By what amount did the company’s paid-in capital increase during 19X6? 

d. Did Star’s total legal capital increase or decrease during 19X6? By what amount? 






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