Elysium Corp. had the following relevant account balances at 1/1/17: Common stoc

Question

Elysium Corp. had the following relevant account balances at 1/1/17:

Common stock ($1 par value, 100,000 shares issued and 87,000 outstanding at 1/1/17) $100,000
Additional Paid-in Capital – CS $4,200,000
7% Preferred stock ($500 par value, 25,000 shares issued and outstanding) $12,500,000
Treasury Stock 689,000
Additional Paid-in Capital – TS 0
Retained Earnings $137,783,000

The following transactions occurred during 2017:
• Elysium reissued 7,000 shares of treasury stock at an issue price of $73 a share.
• Elysium declared a 10% stock dividend when the share price of its common stock was $71.
• Elysium declared and paid a $1,800,000 to common and preferred shareholders. The preferred shares had no dividends in arrears.
• Elysium repurchased 15,000 shares at $65 a share.

Answer the following questions:

A. Provide journal entries for each of the above transactions.

B. If the common stock had been issued in one issue, what was the price per share at the date of issue?

C. What was the cost of the shares in treasury at 1/1/17?

D. What is the dividend per share paid to common shareholders?

E. What were the shares issued and outstanding at 12/31/17?

Explanation / Answer

Part A. Working-1 Treaury Stock $ 689000 No of Treasury Stock 100000-87000=13000 Hence Treasury Stock Purchased at 689000/13000 53 Per share Elysium reissued 7,000 shares of treasury stock at an issue price of $73 a share Event Account Debit Credit 1 Cash 7000*73 511000 Treasury Stock 7000*53 371000 Additional Paid In Capital-Treasury Stock 140000 2 Elysium declared a 10% stock dividend when the share price of its common stock was $71. Retained Earning (94000*10%*71) 667400 Common Stock Dividend Distributable (94000*10%*1) 9400 Additional Paid In Capital-Common Stock 658000 3. Elysium declared and paid a $1,800,000 to common and preferred shareholders. The preferred shares had no dividends in arrears. Retained Earning Pard-D 925000 Dividend Payable-Common Stock 925000 Dividend Payable-Common Stock 925000 Cash 925000 Retained Earning Pard-d 875000 Dividend Payable-Preferred stock 875000 Dividend Payable-Preferred stock 875000 Cash 875000 4 Elysium repurchased 15,000 shares at $65 a share Treasury Stock 975000 Cash 15000*65 975000 Part B Par Value of 100000 Shares 100000 Add: Additional paid in capital 4200000 4300000 Share price per share for issue 4300000/100000=43 per share Part C Treaury Stock $ 689000 No of Treasury Stock 100000-87000=13000 Cost of Treasury Stock 689000/13000 53 Per share Part D Total Dividend 1800000 Dividend to Preferred Shareholders 12500000*7% 875000 Dividend to Common Stockholders 925000 No of shares outstanding 87000+7000+9400 103400 Per share dividend 925000/103400           8.95 Part E Beginning Shares issued and outstanding 87000 Add: Issue of Treasury Stock 7000 Add: Stock Dividend (87000+7000)*10% 9400 Ending Shares issued and outstanding 103400

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.