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For a recent 2-year period, the balance sheet of Grouper Company showed the following stockholders’ equity...

For a recent 2-year period, the balance sheet of Grouper Company showed the following stockholders’ equity data at December 31 (in millions).

2017

2016

Additional paid-in capital

$ 920

$ 825

Common stock

651

639

Retained earnings

7,230

5,310

Treasury stock

1,596

930

   Total stockholders’ equity

$7,205

$5,844

Common stock shares issued

217

213

Common stock shares authorized

500

500

Treasury stock shares

38

30


(a) Answer the following questions.

(1) What is the par value of the common stock? (Round par value to 2 decimal places, e.g. $3.15.)

Par value of common stock


(2) What is the cost per share of treasury stock at December 31, 2017, and at December 31, 2016?

December 31, 2017

December 31, 2016

Cost per share of Treasury stock


(b) Prepare the stockholders’ equity section at December 31, 2017.

Solutions

Expert Solution

(a)
1 Par value of common stock
2017 2016
(millions) (millions)
(i) Common stock value $        651 $        639
(ii) Common stock shares issued 217 213
(i) / (ii) Par value of common stock $             3 $             3
2 Cost per share of Treasury stock
2017 2016
(millions) (millions)
(i) Treasury stock 1596 930
(ii) Number of Treasury stock shares 38 30
(i) / (ii) Cost per share of Treasury stock $          42 $          31
Grouper Company
Statement of Stockholder's Equity
For the year ended December 31, 2017
Common stock - $3 par value 500 million shares authorizes, 217 million shares issued $        651
Add: Paid in capital in excess of par value $        920
Total Paid up capital $    1,571
Retained earnings $    7,230
Less: Treasury stock (38 X $42) $    1,596
Total Stockholder's equity $    7,205

ekkarill92 answered 1 year ago
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