In: Accounting
The stockholders’ equity section on the December 31, 2014, balance sheet of American Corporation follows: |
Stockholders’ Equity | ||||
Contributed capital | ||||
Preferred
stock (par $21; authorized 17,000 shares, ? issued, of which 700 shares are held as treasury stock) |
$ | 126,000 | ||
Common stock
(no-par; authorized 24,000 shares, issued and outstanding 9,000 shares) |
801,000 | |||
Contributed
capital (includes $3,000 from treasury stock transactions) |
15,000 | |||
Retained earnings | 48,000 | |||
Cost of treasury stock, preferred | (16,800 | ) | ||
Required: |
1. | Calculate the number of shares of preferred stock issued |
Number of preferred shares issues? |
2. | Calculate the number of shares of preferred stock outstanding |
Number of preferred shares outstanding |
3. |
Calculate the average sale price of the preferred stock when issued. (Round your answer to 2 decimal places.) |
Average sales price per share? |
4. |
Have the treasury stock transactions increased corporate resources or decreased corporate resources? By how much? (Enter the amount as positive value.) |
5. |
By how much the treasury stock transactions increased (decreased) stockholders’ equity? (Enter the amount as positive value.) |
6. | How much did the treasury stock held cost per share? (Round your answer to 2 decimal places.) |
Cost per share? |
7. | Calculate the value of total stockholders’ equity |
Total stockholders equity? |
8. | Calculate the average issue price of the common stock: (Round your answer to 2 decimal places.) |
Average issue price? |
Requirement 1) Number shares Preferred share Issues: 6000 Numbers
Amount Preferred Stock Issued /Par Value of Preferred Stock
126000 $/ 21$ =6000 Numbers
Requirement 2) Number Preferred Share outstanding: 11000 Numbers
Authorized Preferred Stock – Issued Preferred Stock
17000 -6000 = 11000 Number
Requirement 3) Average Sale Price Price Per Share:42 $
average issue price per share of preferred stock: [(number of shares issued X par value) + paid in capital] / number of shares issued
[6000*21 $+126000 $]/6000 = 42$
Requirement 4) Treasury Stock Transaction Decreased Corporate Resources 2100 $
Preferred Stock Held by Treasury Stock in Par Value (700*21 $) =14700 $
Less : Cost of Treasury Stock =(16800 $)
Decrease in Amount of Corporate Resources = (2100 $)