Elysium Corp. had the following relevant account balances at 1/1/17: Common stock ($1 par value, 100,000...

Elysium Corp. had the following relevant account balances at 1/1/17:

Common stock ($1 par value, 100,000 shares issued and 87,000 outstanding at 1/1/17) $100,000
Additional Paid-in Capital – CS $4,200,000
7% Preferred stock ($500 par value, 25,000 shares issued and outstanding) $12,500,000
Treasury Stock 689,000
Additional Paid-in Capital – TS 0
Retained Earnings $137,783,000

The following transactions occurred during 2017:
• Elysium reissued 7,000 shares of treasury stock at an issue price of $73 a share.
• Elysium declared a 10% stock dividend when the share price of its common stock was $71.
• Elysium declared and paid a $1,800,000 to common and preferred shareholders. The preferred shares had no dividends in arrears.
• Elysium repurchased 15,000 shares at $65 a share.

Answer the following questions:

A. Provide journal entries for each of the above transactions.

B. If the common stock had been issued in one issue, what was the price per share at the date of issue?

C. What was the cost of the shares in treasury at 1/1/17?

D. What is the dividend per share paid to common shareholders?

E. What were the shares issued and outstanding at 12/31/17?

Expert Solution

Part A.
Working-1	Treaury Stock	$ 689000
	No of Treasury Stock	100000-87000=13000
	Hence Treasury Stock Purchased at	689000/13000	53 Per share

	Elysium reissued 7,000 shares of treasury stock at an issue price of $73 a share

Event	Account	Debit	Credit

1	Cash 7000*73	511000
	Treasury Stock 7000*53		371000
	Additional Paid In Capital-Treasury Stock		140000

2	Elysium declared a 10% stock dividend when the share price of its common stock was $71.

	Retained Earning (9400010%71)	667400
	Common Stock Dividend Distributable (9400010%1)		9400
	Additional Paid In Capital-Common Stock		658000

3.	Elysium declared and paid a $1,800,000 to common and preferred shareholders. The preferred shares had no dividends in arrears.

	Retained Earning Pard-D	925000
	Dividend Payable-Common Stock		925000

	Dividend Payable-Common Stock	925000
	Cash		925000

	Retained Earning Pard-d	875000
	Dividend Payable-Preferred stock		875000

	Dividend Payable-Preferred stock	875000
	Cash		875000

4	Elysium repurchased 15,000 shares at $65 a share

	Treasury Stock	975000
	Cash 15000*65		975000

Part B
	Par Value of 100000 Shares	100000
	Add: Additional paid in capital	4200000
		4300000
	Share price per share for issue	4300000/100000=43 per share

Part C
	Treaury Stock	$ 689000
	No of Treasury Stock	100000-87000=13000
	Cost of Treasury Stock	689000/13000	53 Per share

Part D
	Total Dividend		1800000
	Dividend to Preferred Shareholders	12500000*7%	875000
	Dividend to Common Stockholders		925000
	No of shares outstanding	87000+7000+9400	103400
	Per share dividend	925000/103400	8.95

Part E
	Beginning Shares issued and outstanding	87000
	Add: Issue of Treasury Stock	7000
	Add: Stock Dividend (87000+7000)*10%	9400
	Ending Shares issued and outstanding	103400

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