At December 31, Year 1, Bolton Corporation has par value common stock with a par value of $1.50 per share, Additional paid-in capital of $60,000, total shareholders' equity of $100,000, and retained earnings of $25,000.What is the number of common stock shares?
A)5,000
B)10,000
C)15,000
D)20,000
E)25,000

Question

Quizplus · Accepted Answer

We can use the formula:
Total Shareholders' Equity = Common Stock + Additional Paid-in Capital + Retained Earnings
Plug in the given values:
$100,000 = Common Stock + $60,000 + $25,000
Solve for Common Stock:
Common Stock = $100,000 - $60,000 - $25,000
Common Stock = $15,000
Finally, divide Common Stock by the par value per share to find the number of shares:
Number of shares = Common Stock / Par Value per share = $15,000 / $1.50 per share = 10,000 shares. Therefore, the answer is B.

At December 31, Year 1, Bolton Corporation Has Par Value