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 $ 98,000 12,740 552,900 27,000 9,350 outstanding 5,700 shares) Retained Earnings Treasury Stock, 1,000 Preferred shares at cost Assume 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 to 2 decimal places.) 1. The number of shares of preferred stock issued was 2. The number of shares of preferred stock outstanding was 3. 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 per share

Explanation / Answer

Ans.1 Number of shares of preferred stock issued 4900 *Number of shares   = Preferred stock / Par value 98000 / 20 4900 Ans.2 Number of shares of preferred stock outstanding 3900 *Outstanding preferred shares   = No. of issued shares - No. of shares held in treasury stock 4900 - 1000 3900 Ans.3 Average issue price of preferred stock 22.60 per share *Average issue price = (Preferred stock + Additional paid-in capital) / No. of shares issued (98000 + 12740) / 4900 22.60 per share Ans.4 Average issue price of common stock 97 per share *Average issue price = Common stock / No. of shares issued 552900 / 5700 97 Ans.5 The treasury stock transaction increased (decreased) stockholders' equity by 9350 *The stock holders' equity will decreased by the same amount of treasury stock cost (i.e. 9350) Ans.6 Treasury stock cost    =   Treasury stock / No. of shares held in treasury stock 9350 / 1000 9.35 per share Ans.7 Total stockholders' equity 681290 *Calculation: Preferred stock (par $20, authorized 10000 shares, 4900 shares issued, of which 1000 shares are held as treasury stock) 98000 Additional Paid-in capital, Preferred 12740 Common stock (no-par; authorized 20000 shares, issued and outstanding 5700 shares) 552900 Total contributed capital 663640 Retained earnings 27000 Less: Preferred treasury stock -9350 Total stock holders' equity 681290

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