Question
In: Accounting
he year-end balance sheet of Columbus Products, Inc., includes the following stockholders’ equity section (with certain...
he year-end balance sheet of Columbus Products, Inc., includes the following stockholders’ equity section (with certain details omitted).
| Stockholders' equity: | |||
| Capital stock: | |||
| 7% cumulative preferred stock, $100 par value | $ | 13,000,000 | |
| Common stock, $5 par value, 5,000,000 shares authorized, 4,200,000 shares issued and outstanding | 21,000,000 | ||
| Additional paid-in capital: | |||
| Common stock | 41,000,000 | ||
| Retained earnings | 64,450,000 | ||
| Total stockholders’ equity | $ | 139,450,000 | |
From this information, compute answers to the following questions.
a. How many shares of preferred stock have been issued?
b. What is the total amount of the annual dividends to which preferred stockholders are entitled?
c. What was the average issuance price per share of common stock?
d. What is the amount of legal capital and the amount of total paid-in capital?
e. What is the book value per share of common stock, assuming no dividends in arrears?
f. Is it possible to determine the fair market value per share of common stock from the stockholders' equity section above?
Solutions
Expert Solution
Answer a. No. of preferred stock have been issued = 130000 shares
calculated a No. of preferred stock = $13000000/100 = 130000
Answer b. Annual dividend preferred stockholders are entitled = $910000
Calculated as preferred dividend = $13000000*7% = $910000
Answer c. Average issue price per common share = $14.76 per share
issue price for common stock = ($21000000+$41000000)/4200000 = $14.79 per share
Answer d. Legal Capital = 34000000 and paid in capital = 75000000
Calculated as
Legal capital = par value of common shares + stated value of preferred shares = $21000000+13000000 = 34000000
Paid in capital = $21000000+13000000+41000000 = $75000000
Answer e Book value per common share = $30.11 per share
Calculated as
Book value per share = Total Shareholder equity - Preferred share value/No. of Common shares
= (139450000-13000000)/4200000 = $30.11 per share
Answer f. No its is not possible from equity section as it is determined by market due to effect of many other factors
ekkarill92 answered 1 year agoRelated Solutions
The year-end balance sheet of Knights, Inc., includes the following stockholders’ equity section (with certain details...
The year-end balance sheet of Knights, Inc., includes the
following stockholders’ equity section (with certain details
omitted).
Stockholders’ equity:
10% cumulative preferred stock, $100 par value, authorized
100,000 shares
$4,400,000
Common stock, $2 par value, authorized 2,000,000 shares
3,400,000
Additional paid-in capital: common stock
6,800,000
Donated capital
400,000
Retained earnings
3,160,000
Total stockholders’ equity
$18,160,000
Instructions
From this information, compute answers to the following
questions.
How many shares of preferred stock have been issued?
What is the total amount of...
The year-end balance sheet of Knights, Inc., includes the following stockholders’ equity section (with certain details...
The year-end balance sheet of Knights, Inc., includes the
following stockholders’ equity section (with certain details
omitted). Stockholders’ equity: 10% cumulative preferred stock,
$100 par value, authorized 100,000 shares $4,400,000 Common stock,
$2 par value, authorized 2,000,000 shares 3,400,000 Additional
paid-in capital: common stock 6,800,000 Donated capital 400,000
Retained earnings 3,160,000 Total stockholders’ equity $18,160,000
Instructions From this information, compute answers to the
following questions. a. How many shares of preferred stock have
been issued? b. What is the total...
The stockholders' equity section of the balance sheet typically includes the line items of retained earnings,...
The stockholders' equity section of the balance sheet typically
includes the line items of retained earnings, common stock,
treasury stock, and other comprehensive income.
Select two of these line items (common stock and Treasury stock)
and explain what their balances might indicate about how Ford Motor
Company is utilizing the investment by its stockholders.
In your response, address whether you would want to purchase
stock in the company based on your analysis.
Please use a scholarly article for reference.
Which of the following is true about stockholders' equity? a This section of the Balance Sheet...
Which of the following is true about stockholders' equity?
a
This section of the Balance Sheet will always equal total
assets.
b
This section of the Balance Sheet can only be increased if the
company sells more stock to its stockholders.
c
Corporations always must have at least two accounts in this
section of the Balance Sheet: common stock and retained
earnings.
d
Retained earnings in stockholders equity is the one account on
the Balance Sheet that the ending balance...
list the errors the following stockholders equity section of the balance sheet prepared as of the...
list the errors the following stockholders equity
section of the balance sheet prepared as of the end of the current
year:
paid in capital:
preferred 2% stock,$80 par(125,000 shares authorized and issued
$10,000,000
excess of issue price over par 500,000-10,500,000
retaining earnings $96,700,000
treasury stock(75,000 shares to cost)-1,755,000
dividends payable 430,000
total paid in capital $109,385,000
common stock $20 par (1,000,000 shares authorized, 825,000 shares
issued - $17,655,000
organizing costs 300,000
total stockholders equity $127,340,000
Analysis of Stockholders' Equity The Stockholders' Equity section of the December 31, 2017, balance sheet of...
Analysis of Stockholders' Equity The Stockholders' Equity
section of the December 31, 2017, balance sheet of Eldon Company
appeared as follows: Preferred stock, $40 par value, 5,000 shares
authorized, ? shares issued $200,000 Common stock, ? par, 10,000
shares authorized, 10,000 shares issued 100,000 Additional paid-in
capital—Preferred 9,000 Additional paid-in capital—Common 800,000
Additional paid-in capital—Treasury stock 2,000 Total contributed
capital $1,111,000 Retained earnings 39,000 Treasury stock,
preferred, 100 shares (3,300) Total stockholders’ equity $ ?
Required: Determine the following items...
Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January...
Stockholders' Equity: Transactions and
Statement
The stockholders' equity section of Night Corporation's balance
sheet at January 1 follows:
Common stock, $10 par value, 300,000 shares authorized, 60,000
shares
600,000
issued, 6,000 shares in treasury
Additional paid-in capital
In excess of par value
960,000
From treasury stock
60,000
1,020,000
Retained earnings
696,000
2,316,000
Less: Treasury stock (6,000 shares) at cost
276,000
Total Stockholders’ Equity
2,040,000
The following transactions affecting stockholders’ equity
occurred during the year:
Jan.
8
Issued 15,000 shares of...
Stockholders’ Equity: Transactions and Statement The stockholders’ equity section of Night Corporation’s balance sheet at January...
Stockholders’ Equity: Transactions and
Statement
The stockholders’ equity section of Night Corporation’s balance
sheet at January 1 follows:
Common stock, $5 par value, 300,000 shares authorized, 60,000
shares
$300,000
issued, 6,000 shares in treasury
Additional paid-in capital
In excess of par value
$480,000
From treasury stock
30,000
510,000
Retained earnings
348,000
1,158,000
Less: Treasury stock (6,000 shares) at cost
138,000
Total Stockholders’ Equity
$1,020,000
The following transactions affecting stockholders’ equity
occurred during the year:
Jan.
8
Issued 15,000 shares of...
Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January...
Stockholders' Equity: Transactions and
Statement
The stockholders' equity section of Night Corporation's balance
sheet at January 1 follows:
Common stock, $8 par value, 300,000 shares authorized, 60,000
shares
480,000
issued, 6,000 shares in treasury
Additional paid-in capital
In excess of par value
720,000
From treasury stock
45,000
765,000
Retained earnings
522,000
1,767,000
Less: Treasury stock (6,000 shares) at cost
207,000
Total Stockholders’ Equity
1,560,000
The following transactions affecting stockholders’ equity
occurred during the year:
Jan.
8
Issued 15,000 shares of...
Stockholders' Equity Section of Balance Sheet The following accounts and their balances appear in the ledger...
Stockholders' Equity Section of Balance Sheet
The following accounts and their balances appear in the ledger
of Goodale Properties Inc. on June 30 of the current year:
Common Stock, $15 par
$792,000
Paid-In Capital from Sale of Treasury Stock
32,500
Paid-In Capital in Excess of Par—Common Stock
21,120
Retained Earnings
1,243,000
Treasury Stock
16,340
Prepare the Stockholders’ Equity section of the balance sheet as
of June 30 using Method 1 of Exhibit 8. Eighty thousand shares of
common stockare authorized,...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- In a two – story building, an exterior column is to be designed for a service...
- Explain the use of neural networking modeling in predictive analytics. Discuss a real-life example of where...
- Boarder line and antisocial disorder are perhaps the most research personality disorder.What are the most common...
- Read at least 2 academically reviewed articles and Write an annotated bibliography paper on Master Budgeting
- Why normalization and referential integrity are important principles when designing relational databases?
- Respond to the following in a minimum of 175 words: Discuss what elements should be present...
- 1) The 3rd bright fringe of a double slit interference pattern is 30.0 cm above the...
ADVERTISEMENT