The shareholders’ equity section of Superior Corporation’s balance sheet as of December 31, 2018, is as follows: Shareholders’ Equity Preferred stock, $100 par value; authorized, 300,000 shares; issued, 33,000 shares $3,300,000 Common stock, $5 par value; authorized, 2,000,000 shares; issued, 377,000 shares 1,885,000 Paid-in capital in excess of par—preferred 96,000 Paid-in capital in excess of par—common 825,000 Retained earnings 2,920,000 $9,026,000 The following events occurred during 2019: Jan. 5 10,500 shares of authorized and unissued common stock were sold for $7 per share. 16 10,000 shares of authorized and unissued preferred stock were sold for $108 per share. Apr. 1 79,000 shares of common stock were repurchased for the treasury at a price of $21 per share. Superior uses the cost method to account for treasury stock. Sept. 1 3,500 shares of preferred stock are issued in exchange for a piece of land. The land has an appraised value of $389,500. The preferred stock currently trades on the New York Stock Exchange at a price of $109 per share. Dec. 1 24,000 shares of treasury stock are reissued at a price of $24 per share. Required: 1. Prepare journal entries for each of the above transactions. 2. Calculate the number of authorized, issued, and outstanding common shares as of December 31, 2019. 3. Calculate Superior’s legal capital at December 31, 2019. My question is what are the issued shares and total legal capital. I have calculated that the Authorized Common Shares: 2,000,000 and the Outstanding Shares is 332,500. I am not quite understanding the concept of Issued shares. Thank you

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The shareholders’ equity section of Superior Corporation’s balance sheet as of December 31, 2018, is as follows:

Shareholders’ Equity
Preferred stock, $100 par value; authorized, 300,000 shares; issued, 33,000 shares	$3,300,000
Common stock, $5 par value; authorized, 2,000,000 shares; issued, 377,000 shares	1,885,000
Paid-in capital in excess of par—preferred	96,000
Paid-in capital in excess of par—common	825,000
Retained earnings	2,920,000
	$9,026,000

The following events occurred during 2019:

Jan. 5	10,500 shares of authorized and unissued common stock were sold for $7 per share.
16	10,000 shares of authorized and unissued preferred stock were sold for $108 per share.
Apr. 1	79,000 shares of common stock were repurchased for the treasury at a price of $21 per share. Superior uses the cost method to account for treasury stock.
Sept. 1	3,500 shares of preferred stock are issued in exchange for a piece of land. The land has an appraised value of $389,500. The preferred stock currently trades on the New York Stock Exchange at a price of $109 per share.
Dec. 1	24,000 shares of treasury stock are reissued at a price of $24 per share.

Required:

1.	Prepare journal entries for each of the above transactions.
2.	Calculate the number of authorized, issued, and outstanding common shares as of December 31, 2019.
3.	Calculate Superior’s legal capital at December 31, 2019.

My question is what are the issued shares and total legal capital. I have calculated that the Authorized Common Shares: 2,000,000 and the Outstanding Shares is 332,500. I am not quite understanding the concept of Issued shares. Thank you

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