[kaylamarie1]

Star Corporation issued both common and preferred stock during 20X8. The stockholders' equity sections of the company's balance sheets at the end of 20X8 and 20X7 follow.


20X8 20X7
Preferred stock, $100 par value, 10% $600,000 $500,000
Common stock, $10 par value 2,350,000 1,550,000

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 $16,064,000 $12,570,000

1. Compute the number of preferred shares that were issued during 20X
2. Calculate the average issue price of the common stock sold in 20X8.
3. By what amount did the company's paid-in capital increase during 20X8?
4. Did Star's total legal capital increase or decrease during 20X8? By what amount?

I have googled calculations on how to complete these questions and have not found any. My online book with Ashford university doesn't show them either. So I am lost.

[rehmanvohra]

20X8 20X7
Preferred stock, $100 par value, 10% $600,000 $500,000
Common stock, $10 par value 2,350,000 1,550,000

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 $16,064,000 $12,570,000

1. Compute the number of preferred shares that were issued during 20X8
($600,500,000)/100 = 1,000 shares

2. Calculate the average issue price of the common stock sold in 20X8.
($2,350,000-1,550,000) - (4,620,000-3,600,000)= $1,870,000/$850,000/10)=$22
3. By what amount did the company's paid-in capital increase during 20X8?
($600,000+2,350,000+24,000+4620,000) - (500,000+1,550,000+3,600,000)=1,944,000
4. Did Star's total legal capital increase or decrease during 20X8? By what amount?
$16,064,000-12570,000 = $3,494,000