VELCRO WORLD Balance Sheet (partial) ($ in thousands) Stockholders\' equity: Pre

Question

VELCRO WORLD Balance Sheet (partial) ($ in thousands) Stockholders' equity: Preferred stock, $1 par value $ 5,400 Common stock, $1 par value 27,000 Additional paid-in capital 588,000 Total paid-in capital 620,400 Retained earnings 282,000 Treasury stock, 12,000 common shares (204,000) Total stockholders' equity $ 698,400 --------------------------------------------------------------------------------------------- A) If the common shares were issued at $17 per share, at what price per share were the preferred shares issued? B) If retained earnings at the beginning of the period was $223 million and $24 million was paid in dividends during the year, what was the net income for the year? C) What was the average cost per share of the treasury stock acquired?

Explanation / Answer

Hi, The answers are as below: a) 27000 /1 par value = 27,000 common shares issued 16 Additional paid-in capital, common stock x 27000 = 432000 total common additional paid-in capital. =620400 - 432000 = 188400 (preferred additional paid-in capital) =(188400 + 5400) / 5400 = 35.89 issue price for preferred shares. 2) Beg. Balance + Net income - Dividends = End. Balance 223 + Net income - 24 = 282 Net income = 83,000,000 3) =204000/12000 = 17 per share Thanks, Aman

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