The following information is from the December 31 2018 balan

The following information is from the December 31, 2018 balance sheet of Millner Corporation. Preferred Stock, $100 par $560,000 PaidminusIn Capital in Excess of Parlong dash—Preferred 43,000 Common Stock, $1 par 190,000 PaidminusIn Capital in Excess of Parlong dash—Common 510,000 Retained Earnings 191,500 Total Stockholders\' Equity $1,494,500 What was the average issue price of the common stock shares? (Round your answer to the nearest cent.)

A. $1.88 B. $2.68 C. $3.68 D. $1.00

Solution

Calcuation of average issue price of common stock

Overall issue amount of common stock = Total par value received + capital in excess of par value

= ($1 x 190,000 shares) + 510,000 = $700,000

Total Shares received = $190,000 / $1 par value = 190,000 shares

Average issue price of common stock = $700,000 / 190,000 shares = $3.68 per share

Correct Answer is C. All other information is not necessary for calculating average issue price