Chapter 10: In class assignment-Answers to be submitted in Canvas Now Enterprise

Question

Chapter 10: In class assignment-Answers to be submitted in Canvas Now Enterprises Balance Sheet (partial) At December 31, Year 4 $550,000 142,000 3,419,000 4,111,000 845,000 Treasury stock (15,000 common shares) 420,000) Stockholders' Equity: Preferred stock ($100 par) Common stock ($1 par) Additional Paid in capital Total paid in capital Retained earnings Total stockholders' equity 1. How many shares of preferred stock have been issued? 2. How many shares of common stock have been issued? 3. If the common shares were issued at $25 per share, at what average price per share were the preferred shares issued? 4. If retained earnings at the beginning of the period was $635,000 and $352,000 was earned in net income, what was the amount of dividends declared during the year? 5. What was the average cost per share of the treasury stock acquired? 6. How many shares of common stock are outstanding? For 7-10 use assume that the company sold 5,000 shares of its treasury stock for $32 per share 7. How much would Additional paid-in capital (APIC) change? 8. How much would Stockholders' Equity change? 9. How many shares of Common Stock would be outstanding after the reissuance? 10. How many shares of Common Stock would be issued after the reissuance?

Explanation / Answer

1. Preferred stock issued = $550000/$100 = 5500 shares

2. Common stock issued = $142000/$1 = 142000 shares

3. Average price of preferred shares = $102 per share

4. Dividends declared: $142000

5. Average cost per share of treasury stock acquired = $420000/15000 = $28

6. Common stock outstanding = Shares issued - Treasury stock = 142000 - 15000 = 127000

Per Chegg guidelines, 4 sub-parts are answerable. Please post remaining separately. Thank you.

Total paid in capital $ 4111000 Less pertaining to common stock (142000 x $25) 3550000 Balance pertaining to preferred stock $ 561000 Number of preferred stock 5500 Average price of preferred stock $ 102

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