The Torre Company has the following stockholders\' equity account balances in st
ID: 2424829 • Letter: T
Question
The Torre Company has the following stockholders' equity account balances in stockholders equity on December 31.
Common Stock – $5 par, 60,000 shared issued $300,000
PaidIn Capital in Excess of Par—Common Stock 600,000
Preferred stock – $100 par, 5,000 shares issued 500,000
PaidIn Capital in Excess of Par—Preferred 100,000
Retained Earnings 200,000
Treasury Stock (cost – $12 per share) 60,000
Answer the following questions:
1. How many shares of treasury stock are owned?
______ shares
2. What was the average market price per share at which common stock was issued? If required, round your answer to two decimal places.
$ ______ per share
3. What was the average market price per share at which preferred stock was issued? If required, round your answer to two decimal places.
$________ per share
4. What is the total value of the paid-in capital portion of stockholders' equity?
$_________
5. What is the total value of stockholders' equity?
$__________
6. How many shares of common stock are outstanding?
$_______shares
7. If net income for the year was $75,000 and a preferred stock dividend of $20,000 was paid, what was the beginning value of retained earnings? How much is earnings per share for the year? If required, round your answer to two decimal places.
Beginning value of retained earnings $ ______
Earnings per share $ _____
Explanation / Answer
1. 5,000 shares (60,000 /12)
2. $ 15 ( 900,000 /60,000)
3. $ 120 (600,000 /5,000)
4. $ 1,440,000 ( 1,500,000-60,000)
5. $ 1,640,000 ( 1,440,000 + 200,000)
6. 55,000 shares ( 60,000 -5,000)
7. Beginning balance in Retained earnings was $ 145,000
Earning per share of common stock =55,000 / 55,000 = $ 1 per share outstanding.
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