XYZ had the following information available from their financial statements at 2

Question

XYZ had the following information available from their financial statements at 2013 year end:

Common Stock                                                                 $1,000,000

Retained earnings                                                           $   500,000

Net Income                                                                        $   200,000

Common Stock additional paid-in-capital               $9,000,000

Dividends declared and paid                                       $   400,000

CS Shares authorized     10,000,000

CS Issued                             1,000,000

CS Outstanding                      800,000   

1. Calculate the beginning retained earnings for 2013.

2. Calculate the par value of a share of common stock.

3. Calculate the number of treasury shares of common stock.

Explanation / Answer

1)Retained earning at beginning = Retained earning at end +Dividend -net income

                                                            = 500,000 + 400,000 - 200,000

                                                           = $ 700,000

2)par value of common stock = common stock /issued

                                                     = 1,000,000 / 1,000,000

                                                     = $ 1per share

3)Number of treasury stock = 1,000,000 - 800,000

                                                 = 200,000 shares

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