Reference no: EM132505095

The balance sheet of Alex Bros. follows:

Assets $840,000,

Liabilities $300,000,

Preferred stock 50,000,

Common stock 300,000,

Additional paid-in capital100,000,

Retained earnings, 130,000

Less:

Treasury stock(40,000)

Total assets$840,000

Total liabilities and shareholders' equity $840,000

• Of the 200,000 common shares authorized, 50,000 shares were issued for $8 each when the company began operations. There have been no common stock issuances since; 45,000 shares are currently outstanding, and 5,000 shares are held in treasury. Net income for the year just ended was $45,000.

Question 1: Compute the par value of the issued common shares.

Question 2: Compute the book value of each common share. (Round answer to 2 decimal places, e.g. 1.25.)

Question 3: At what average price were the treasury shares purchased?