Par value : It refers to the value of a stock that is stated by the corporation’s charter. It is also known as face value of a stock. Market value : It refers to the estimated price of a stock that a buyer is willing to pay and the seller is willing to accept in the stock market. To explain: the reason for the difference in the amount of par value and market value.

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Cullumber Company uses a job order cast system and applies overhead to production on the basis of direct labor costs. On January 1, 2025, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $16,800, direct labor $10,000, and manufacturing overhead $13,440. As of January 1, Job 49 had been completed at a cost of $75,600 and was part of finished goods inventory. There was a $12,600 balance in the Raw Materials Inventory account on January 1. During the month of January, Cullumber Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold on account during the month for $102.480 and $132,720, respectively. The following additional events occurred during the month. 1 Purchased additional raw materials of $75,600 on account. 2 Incurred factory labor costs of $58,800. 3 Incurred manufacturing overhead costs as follows: depreciation expense on equipment $10,080; and various other…

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Chapter 11, Problem 22Q

To determine

Par value: It refers to the value of a stock that is stated by the corporation’s charter. It is also known as face value of a stock.

Market value: It refers to the estimated price of a stock that a buyer is willing to pay and the seller is willing to accept in the stock market.

To explain: the reason for the difference in the amount of par value and market value.

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