The stockholders\' equity section on the December 31 balance sheet of Chemfast C

Question

The stockholders' equity section on the December 31 balance sheet of Chemfast Corporation reported the following amounts Contributed Capital Preferred Stock (par $20; authorized 10,000 shares, ? issued, of which 1,000 shares are held as treasury stock) Additional Paid-in Capital, Preferred Common Stock (no-par, authorized 20,000 shares, issued and 102,000 13,770 outstanding 5,900 shares) Retained Earnings Treasury Stock, 1,000 Preferred shares at cost 584,100 29,000 9,450 ssume that no shares of treasury stock have been sold in the past Required Complete the following statements. (Decreases should be indicated by a minus sign. Round per share 2 decimal places.) 1. The number of shares of preferred stock issued was 2 The number of shares of preferred stock outstanding was per share The average issue price of the preferred stock was 4. The average issue price of the common stock was 5. The treasury stock transaction increased (decreased) stockholders equity by 6. The treasury stock cost 7 Total stockholders' equity is per share References eBook & Resources

Explanation / Answer

Answer 1 The number of shares of preferred stock issued was = $102000 / $20 Par = 5100 shares Answer 2 The number of preferred stock outstanding was = No.of shares issued - No.of shares held in treasury stock = 5100 shares - 1000 shares = 4100 shares Answer 3 Average issue price of the preferred stock was = [Par value + Additional paid in capital] / No.of shares issued Average issue price of the preferred stock was = [$102000+$13770]/5100 shares = $22.70 per share Answer 4 The average issue price of common stock = Value of no par common stock / No.of shares outstanding = $584100 / 5900 shares = $99 per share Answer 5 The treasury stock transaction decreased stockholders equity by $9450. Answer 6 The treasury stock cost = $9450 / 1000 shares = $9.45 per share Answer 7 Total Stockholders Equity is Common stock , no-par $584,100.00 Preferred stock , Par $102,000.00 Additional paid in capital,Preferred $13,770.00 Retained Earnings $29,000.00 Treasury stock -$9,450.00 Total Stockholders Equity is $719,420.00

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