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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