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    fpsb's Avatar
    fpsb Posts: 18, Reputation: 0
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    #1

    Jan 24, 2009, 07:20 PM
    compute total legal capital
    What is the formula for computing total legal capital?


    A Corporation's stockholders' equity at December 31 consists of the following:

    Preferred stock, 8%, $50 par value, call price $55 per share 100,000 shares authorized, 15,000 shares issued and outstanding... $ 750,000

    Common stock, $4 par value 600,000 shares authorized 500,000 shares issued and 484,000 outstanding... $ 2,000,000

    Additional paid-in-capital in excess of par-Common... $1,000,000

    Retained earnings... $ 500,000

    Treasury Stock.(16,000shares)... $.200,000

    Compute the total legal capital:

    A. $3,000,000.
    B. $3,500,000.
    C. $3,750,000.
    D. $2,750,000.
    fpsb's Avatar
    fpsb Posts: 18, Reputation: 0
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    #2

    Jan 24, 2009, 07:24 PM

    My answer is D, would someone be able to verify?
    cbellalmr's Avatar
    cbellalmr Posts: 1, Reputation: 1
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    #3

    Dec 2, 2011, 05:05 PM
    Maybe you should contact Legal Capital Corp and find out?
    jjhennbaranda's Avatar
    jjhennbaranda Posts: 2, Reputation: 1
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    #4

    Feb 8, 2012, 07:10 AM
    letter D..
    just multiply the par value to the shares that is already issued!!

    cyrielle's Avatar
    cyrielle Posts: 1, Reputation: 1
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    #5

    Feb 17, 2012, 03:28 PM
    letter d...

    15000x50 par=750000
    484000x4= 2000000

    750000+2000000=2750000
    suckseed's Avatar
    suckseed Posts: 1, Reputation: 1
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    #6

    Mar 16, 2012, 07:00 AM
    But doesn't the treasury stock reduce the shares outstanding? Would that mean then, that the legal capital is:
    2,750,000
    (700,000)
    --------------
    2,050,000..
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