Shown Below Is Information Relating to the Shareholders' Equity of Brookdale

question 49

Multiple Choice

Shown below is information relating to the shareholders' equity of Brookdale Corporation at December 31, 2010:
$\begin{array} { l r } 11 \% \text { non-cumulative preference share, } \$ 130 \text { par, 100,000 shares authorized, } & \$ 1,300,000 \\10,000 \text { shares issued } & \\\text { Ordinary shares, } \$ 1.25 \text { par, } 1,000,000 \text { shares authorized, } 600,000 \text { shares } & 750,000 \\\text { issued (of which } 6,000 \text { are held in treasury ) } & \\\text { Share premium: preference shares } & 500,000 \\\text { Share premium: ordinary shares } & 900,000 \\\text { Share premium: treasury share transactions } & 6,000 \\\text { Treasury shares (at cost: } 6,000 \text { ordinary shares) } & ( 192,000 ) \\\text { Retained earnings } & 1,350,000 ) \end{array}$

-Refer to the above data. What was the average issue price per share of ordinary share?

• A) $2.75.
• B) $1.25
• C) $1.50.
• D) $3.75.

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Definitions:

Inventory

The total amount of goods and materials held by a company for the purpose of resale or production, including raw materials, work-in-progress, and finished goods.

GAAP

Generally Accepted Accounting Principles, the standardized set of accounting rules, practices, and procedures used in preparing financial statements in the U.S.

Product Costing

Product costing involves determining all expenses related to the creation of a product, including materials, labor, and overhead, to establish its total cost.

Absorption Costing

In this accounting method, total costs of manufacturing, from direct materials and labor to both fixed and variable overheads, are completely absorbed into the product’s final cost.