Questions 5-9 (of 14) IThe following information applies to the questions displa
ID: 2530482 • Letter: Q
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Questions 5-9 (of 14) IThe following information applies to the questions displayed below] The stockholders' equity section of Velcro World is presented here. VELCRO WORLD Balance Sheet (partial) $ and shares in thousands) Stockholders' equity: Preferred stock, $1 par value Common stock, $1 par value Additional paid-in capital $ 4,500 15,000 363,000 Total paid-in capital Retained earnings Treasury stock, 10,000 common shares 382,500 273,000 (170,000) Total stockholders' equity 485,500 Based on the stockholders' equity section of Velcro World, answer the following questions. Remember that all amounts are presented in thousands. value: 5.00 pointsExplanation / Answer
3
Calculation of average price per share of preferred stock
Total paid in capital
$382,500,000
Less: Common stock (15,000*15)
$225,000,000
Balance from preference stock (A)
$157,500,000
No of preferred stock (B)
4,500,000
Ans
Average issue price for preference stock (C=A/B)
$35
4
Calculation of net income for the year
ending retained earnings
$273,000,000
Less: Opening retained earnings
($235,000,000)
Add: Dividends paid
$15,000,000
Net income for the year
$53,000,000
Ans
Net income for the year (In millions)
$53
Millions
5
Average cost per treasury stock acquired
Cost of treasury stock (A)
$170,000
Treasury stock no's (B)
10,000
Ans
Cost per stock (C=A/B)
$17
3
Calculation of average price per share of preferred stock
Total paid in capital
$382,500,000
Less: Common stock (15,000*15)
$225,000,000
Balance from preference stock (A)
$157,500,000
No of preferred stock (B)
4,500,000
Ans
Average issue price for preference stock (C=A/B)
$35
4
Calculation of net income for the year
ending retained earnings
$273,000,000
Less: Opening retained earnings
($235,000,000)
Add: Dividends paid
$15,000,000
Net income for the year
$53,000,000
Ans
Net income for the year (In millions)
$53
Millions
5
Average cost per treasury stock acquired
Cost of treasury stock (A)
$170,000
Treasury stock no's (B)
10,000
Ans
Cost per stock (C=A/B)
$17
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