If a company issues 2,000 shares for $55 and then repurchases 50 shares at $55,how much is the contributed capital?
A)$0
B)$2,750
C)$107,250
D)$110,000

Question

Quizplus · Accepted Answer

The contributed capital is the total amount of money that investors have paid for the shares they own. In this case, the company issued 2,000 shares for $55 each, which means the contributed capital is:

2,000 shares x $55 per share = $110,000

However, the company repurchased 50 shares at $55 each, which means the contributed capital is reduced by:

50 shares x $55 per share = $2,750

Therefore, the new contributed capital is:

$110,000 - $2,750 = $107,250

Hence, the correct answer is option C.

If a Company Issues 2,000 Shares for $55 and Then