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.

My answer is D, would someone be able to verify?

Maybe you should contact Legal Capital Corp (http://www.legalcapitalcorp.com) and find out?

letter D..
just multiply the par value to the shares that is already issued!!

letter d...

15000x50 par=750000
484000x4= 2000000

750000+2000000=2750000

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..