Out of Africa had the following shareholders' equity section on its balance sheet as of
December 31.
Preferred stock: $100 par, 6%, cumulative $100,000
Common stock: $1 par value 25,000
Additional paid-in capital 300,000
Retained earnings 57,000
Calculate the following:
a. Number of shares of preferred stock outstanding
b. Number of shares of common stock outstanding
What will be an ideal response?
a. $100,00/$100 par value = 1,000 preferred shares
b. $25,000/$1 par value = 25,000 common shares
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