The partial trial balance for Marianna Co. as at December 31, 20x2 is as follows: 20x2...

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).

Solutions

Expert Solution

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

ekkarill92 answered 1 year ago

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