Given the following information, how much was many shares does Seldom Wright Inc
ID: 2735178 • Letter: G
Question
Given the following information, how much was many shares does Seldom Wright Inc. has outstanding in 2015? Assume no treasury stock or paid-in surplus.
Seldom Wright Inc. Balance Sheet
2015
Cash
$10,000
Accounts receivable (net)
35,000
Inventory
100,000
Total Current Assets
$145,000
Property Plant and Equipment (net)
112,500
Total Assets
257,500
Accounts payable
$25,000
Accruals
15,000
Total Current Liabilities
$40,000
Long-term debt
112,500
Common stock (at par = $5)
75,000
Retained earnings
30,000
Total Stockholders’ Equity
105,000
Total Liabilities and Equity
257,500
15,000
75,000
105,000
30,000
Seldom Wright Inc. Balance Sheet
2015
Cash
$10,000
Accounts receivable (net)
35,000
Inventory
100,000
Total Current Assets
$145,000
Property Plant and Equipment (net)
112,500
Total Assets
257,500
Accounts payable
$25,000
Accruals
15,000
Total Current Liabilities
$40,000
Long-term debt
112,500
Common stock (at par = $5)
75,000
Retained earnings
30,000
Total Stockholders’ Equity
105,000
Total Liabilities and Equity
257,500
Explanation / Answer
The total number of outstanding shares can be calculated with the use of following formula:
Number of Outstanding Shares = Value of Common Stock/Par Value Per Share
_______
Solution:
Here, Value of Common Stock = $75,000 and Par Value Per Share = $5
Using these values in the above formula, we get,
Number of Outstanding Shares = 75,000/5 = 15,000 shares (which is Option A)
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