The equity section of Ahab SA at December 31 is as follows.
Ahab SA
Statement of Financial Position (partial)
Equity
Share capital—preference, cumulative, 10,000 shares authorized, 5,000
shares issued and outstanding …………………………………………………………………………………. € 300,000
Share capital—ordinary, no par, 750,000 shares authorized, 600,000
shares issued ………………………………………………………………………………………………………………… 1,200,000
Retained earnings ………………………………………………………………………………………………………… 1,858,000
Less: Treasury shares—ordinary (75,000 shares) …………………………………………………………. 75,000
Total equity …………………………………………………………………………………………………………………. €3,283,000
Instructions
From a review of the equity section, as chief accountant, write a memo to the president of the company answering the following questions.
a. How many ordinary shares are outstanding?
b. Assuming there is a stated value, what is the stated value of the ordinary shares?
c. What is the par value of the preference shares?
