Question

Equity Accounts.

1. Rework the table. Suppose that Fedex now issues 2 million shares at $250 a share. Which of the figures would change?

2. What would happen to table if instead FedEx bought back 2 million shares at $150 per share?

Common shares ($.10 par value per share)	32
Additional paid-in capital	3,085
Retained earnings	23,710
Treasury shares at cost	(7,576)
Other	(357)
Net Common Equity	$18,894
Note:
Authorized shares (millions)	800
Issued shares. of which	318
outstanding shares	267
Treasury shares	51

Answer 1

1.)	Issue 2 Million share
	Increase in Common Shares by ( 2 x .10 )	0.20	Million $
	Increase in Additional paid in capital by ( 2 x 249.90 )	499.80	Million $
	Increase in issued share by	2	Million
	Increase in outstanding shares by	2	Million
	Revise Table
	Common shares ($.10 par value per share)	32.20	=32+0.2
	Additional paid-in capital	3,584.80	=3085+499.8
	Retained earnings	23,710.00
	Treasury shares at cost	-7,576.00
	Other	-357.00
	Net Common Equity	19,394.00
	Note:
	Authorized shares (millions)	800
	Issued shares. of which	320	=318+2
	outstanding shares	269	=267+2
	Treasury shares	51
2.)	Bought back 2 Million share
	Increase in Treasury Share at cost by	300.00	Million $
	Decrease in outstanding share by	2	Million
	Increase in Treasury shares by	2	Million
	Revise Table
	Common shares ($.10 par value per share)	32.00
	Additional paid-in capital	3,085.00
	Retained earnings	23,710.00
	Treasury shares at cost	-7,876.00	(7,576 + 300 )
	Other	-357.00
	Net Common Equity	18,594.00
	Note:
	Authorized shares (millions)	800
	Issued shares. of which	318
	outstanding shares	265	=267-2
	Treasury shares	53	=51+2