The shareholders equity section of Superior Corporation\'s balance sheet as of D
ID: 2491302 • Letter: T
Question
The shareholders equity section of Superior Corporation's balance sheet as of December 31,2012 is as follows:
Preferred stock, $100 par value; authorized, 420,000 shares; issued, 42,000 shares $4,200,000
Common stock, $5 par value; authorized, 2,800,000 shares; issued, 560,000 shares 2,800,000
Paid-in capital in excess of par—preferred 126,000
Paid-in capital in excess of par—common 1,190,000
Retained earnings 3,200,000
The following events occurred during 2013:
Jan. 5 30,000 shares of authorized and unissued common stock were sold for $8 per share.
Jan. 16 30,000 shares of authorized and unissued preferred stock were sold for $107 per share.
April 1 70,000 shares of common stock were repurchased for the treasury at a price of $17 per share.
Superior uses the cost method to account for treasury stock.
Sept. 1 4,000 shares of preferred stock are issued in exchange for a piece of land. The land has an appraised value of $434,000. The preferred stock currently trades on the New York Stock exchange at a price of $107 per share.
Dec. 1 15,000 shares of treasury stock are reissued at a price of $22 per share
Calculate Superior's legal capital at December 31, 2013.
Explanation / Answer
No. of shares Par value$ Paid in Capital$ treasury$ Retained$ common stock: opening balance 560000 2800000 1190000 issued 30000 150000 90000 Acquired (70000) 1190000 Reissued 15000 75000 (255000) 535000 2950000 1355000 935000 Preferred Stock: Opening Balance 42000 4200000 126000 + issued 30000 3000000 210000 + issued 4000 400000 34000 76000 7600000 370000 Retained Earnings 3200000 Par Value Paid in Capital Total Total Legal capital Common Stock, 535000 shares $2950000 $1355000 $4305000 Preferred Stock , 76000 shares $7600000 $370000 $7970000 Retained Earnings $3200000 Less: Treasury Stock ($935000) $2265000 Total value of Shareholders Equity $14,540,000
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