Need immediate help, thanks a ton! The authorized share capital of the Alfred Ca

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Need immediate help, thanks a ton!

The authorized share capital of the Alfred Cake Company is 200,000 shares. The equity is currently shown in the company's books as follows: Common stock ($5 par value) 45, 000 Additional paid-in capital 20, 000 Retained earnings 40, 000 Common equity 105, 000 Treasury stock (5,000 shares) 10, 000 Net common equity 95, 000 How many shares are issued? How many are outstanding? How many more shares can be issued without the approval of shareholders? Suppose that Alfred Cake issues 20,000 shares at $2.00 a share. Complete the following table. Suppose instead that the company bought back 20,000 shares at $4.00 a share. Complete the following table. Common stock Additional paid-in capital Retained earnings Common equity Treasury stock Net common equity

Explanation / Answer

Hi, If you like my answer rate me first...that way only I can earn points. Thanks a) Shares Issued = 45000/5 + 5000 = 14000 b) Shares outstanding = 45000/5 = 9000 c) 5000 or treasury stock can be issued d) only common stock and net common equity will increase rest will remain the same Common stock = 45000 + 20000*2 = 85000 Net common equity = 95000 + 20000*2 = 135000 e) only common stock and net common equity will increase rest will remain the same Common stock = 45000 + 20000*4 = 125000 Net common equity = 95000 + 20000*4 = 175000

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