8 The Torre Company has the following stockholders\' equity account balances in

Question

8 The Torre Company has the following stockholders' equity account balances in stockholders equity on December 31. Common Stock $5 par, 60,000 shared issued Paid-In Capital in Excess of Par-Common Stock Preferred stock $100 par, 5,000 shares issued Paid-In Capital in Excess of Par-Preferred Retained Earnings $300,000 600,000 500,000 100,000 200,000 Treasury Stock (cost $12 per share) 60,000 Answer the following questions 1. How many shares of treasury stock are owned? Treasury stock 2. What was the average market price per share at which common stock was issued? 3. What was the average market price per share at which preferred stock was issued? 4. What is the total value of the paid-in capital portion of stockholders' equity? 5. What is the total value of stockholders' equity? 6. How many shares of common stock are outstanding?

Explanation / Answer

1) treasury stock (60000/12) = 5000 shares 2) Average market value of common stock (300000+600,000)/60000 15 per share 3) Average market value of preferred tock (500,000+100,000)/5000 120 per share 4) total value of paid in capital portion common stock 300,000 addittional paid in capital 600,000 Preferred stock 500,000 addittional paid in capital 100,000 1,500,000 less :Treasury stock -60,000 total stockholder's equity 1,440,000 answer 5) total paid in value common stock 300,000 addittional paid in capital 600,000 Preferred stock 500,000 addittional paid in capital 100,000 Retained earnings 200,000 1,700,000 less :Treasury stock -60,000 total stockholder's equity 1,640,000 answer 6) common shares outstanding (60,000 - 5000 treasury) 55000

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