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Michael's Motor Scooters has 1,000 shares outstanding each with a par value of $0.5. If they...

Michael's Motor Scooters has 1,000 shares outstanding each with a par value of $0.5. If they are sold to shareholders at $5 each, what would the capital surplus be?

a. $4,400

b. $4,500

c. $4,750

d. $4,950

e. $5,000

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Answer #1

b. $4,500

Capital Surplus: ($5.00 - $0.5) * 1,000 = $4,500

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