Star corporation issued both common and predered stock, Ask an Expert

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Star corporation issued both common and predered stock during 20X6. The stockholders' equity section of the company's balance sheets at the end of 20X6 and 20X5 follow:

20X6 20X5

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 20X6.

b) calculate the average issue price of the common stock sold in 20X6.

c) by what amount did the company's paid-in capital increase during 20X6?

d) did Star's total legal capital increase or decrease during 20X6? by what amount?

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