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 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..