In: Accounting
The partial trial balance for Marianna Co. as at December 31, 20x2 is as follows:
20x2 20x1
Common shares $17,045,917 $15,500,000
Contributed Surplus – Stock Options 120,000 300,000
Retained earnings 4,736,776 4,650,000
There are 52,000 stock options which vested on December 31, 20x1 at an exercise price
of $31 per share. The exercise period for this plan started on Jan 1, 20x2 and ends on
December 31, 20x3.
There were 650,000 shares outstanding at the beginning of the year. The net income for
the year was $850,000. No dividends were declared during the year.
The following transactions took place in 20x2:
Mar 1 Issued 100,000 common shares for $400,000
May 31 Holders of stock options exercised their stock options
Sep 30 Repurchased and cancelled 30,000 shares
Keep all decimal places where necessary.
Required –
c) What was the book value per share immediately before the Sep 30 transaction?
b) Prepare the financing section of the Statement of Cash Flow (assume that all
transactions affecting the SCF are the ones above).
i) Book value / share: | Year | |
2002 | 2001 | |
Shares capital | 17,045,917 | 15,500,000 |
Surplus | 4,736,776 | 4,650,000 |
Contributed surplus | 120,000 | 300,000 |
Total equity | 21,902,693 | 20,450,000 |
Outstanding shares | 708,333 | 650,000 |
( 100,000 shares using Weighted average) | ||
Book value | 21,902,693 | |
No. of share | 708,333 | |
BV/ share before Sep transaction | 30.92 | |
II) Cash flow: | |
Net income | 850,000 |
Add:Issued shares on ESOP | 400,000 |
Less: Repurchased shares | 930,000 |
(30,000*31) | |
Net cash in hand (Financing operation) | 320,000 |