VELCRO WORLD Balance Sheet (partial) ($ in thousands) Stockholders\' equity: Pre

Question

VELCRO WORLD Balance Sheet (partial) ($ in thousands) Stockholders' equity: Preferred stock, $1 par value $ 5,000 Common stock, $1 par value 20,000 Additional paid-in capital 575,000 Total paid-in capital 600,000 Retained earnings 278,000 Treasury stock, 10,000 common shares (220,000) - Total stockholders' equity $ 658,000 1. How many shares of preferred stock have been issued? Number of shares? 2 How many shares of common stock have been issued? Number of shares? 3. If the common shares were issued at $20 per share, at what price per share were the preferred shares issued? 4 If retained earnings at the beginning of the period was $240 million and $20 million was paid in dividends during the year, what was the net income for the year? 5 What was the average cost per share of the treasury stock acquired?

Explanation / Answer

1. Number of preferred share = 5000/1 = 5000,000 2. Number of common stock = 20000/1 = 20,000,000 3. Additional paid-in capital = (20-1)*20000 +(P-1)*5000 P= $40 price per share were the preferred shares issued = $40 4. 658 = 240 - 20 +net income net income =$438 verage cost per share of the treasury stock acquired = 220,000/10,000 =$22

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