Please complete the following 7 exercises below in either Excel or a word docume
ID: 2372448 • Letter: P
Question
Please complete the following 7 exercises below in either Excel or a word document (but must be single document). You must show your work where appropriate
3. Analysis of stockholders' equity
Star Corporation issued both common and preferred stock during 20X6. The stockholders' equity sections of the company's balance sheets at the end of 20X6 and 20X5 follow.
20X6
20X5
Preferred stock, $100 par value, 10%
$580,000
$500,000
Common stock, $10 par value
2,350,000
1,750,000
Paid-in capital in excess of par value
Preferred
24,000
—
Common
4,620,000
3,600,000
Retained earnings
8,470,000
6,920,000
Total stockholders' equity
$16,044,000
$12,770,000
a. Compute the number of preferred shares that were issued during 20X6.
b. Calculate the average issue price of the common stock sold in 20X6.
c. By what amount did the company's paid-in capital increase during 20X6?
d. Did Star's total legal capital increase or decrease during 20X6? By what amount?
Chapter 3 Problem 3
3. Manufacturing statements and cost behavior
Tampa Foundry began operations during the current year, manufacturing various products for industrial use. One such product is light-gauge aluminum, which the company sells for $36 per roll. Cost information for the year just ended follows.
Per Unit
Variable Cost
Fixed Cost
Direct materials
$4.50
$ —
Direct labor
6.5
—
Factory overhead
9
50,000
Selling
—
70,000
Administrative
—
135,000
Production and sales totaled 20,000 rolls and 17,000 rolls, respectively There is no work in process. Tampa carries its finished goods inventory at the average unit cost of production.
Instructions:
a. Determine the cost of the finished goods inventory of light-gauge aluminum.
b. Prepare an income statement for the current year ended December 31
c. On the basis of the information presented:
1. Does it appear that the company pays commissions to its sales staff? Explain.
2. What is the likely effect on the $4.50 unit cost of direct materials if next year's production increases? Why?
P.s. Please help me get the right answers and steps :D
20X6
20X5
Preferred stock, $100 par value, 10%
$580,000
$500,000
Common stock, $10 par value
2,350,000
1,750,000
Paid-in capital in excess of par value
Preferred
24,000
—
Common
4,620,000
3,600,000
Retained earnings
8,470,000
6,920,000
Total stockholders' equity
$16,044,000
$12,770,000
Explanation / Answer
3 b .)).
Calculate the average issue price of the common stock sold in 20X6.
(2,350,000 - 1,750,000) / 10 = 60,000 shares issued
[(2,350,000 - 1,750,000) + (4,620,000 - 3,600,000)] / 60,000 = $27 per share
3 c .)) By what amount did the company's paid-in capital increase during 20X6?
500,000 + 1,750,000 +3,600,000 = $5,850,000 paid-in capital 2005
580,000 + 2,350,000 + 24,000 + 4,620,000 = $7,574,000 paid-in capital 2006
7,575,000 - 5,850,000 = $1,724,000 increase
3 d .)) Did Star's total legal capital increase or decrease during 20X6? By what amount?
Legal capital is the par value of stock.
500,000 + 1,750,000 = $2,250,000 legal capital 2005
580,000 + 2,350,000 = $2,930,000 legal capital 2006
2,930,000 - 2,250,000 = $680,000 increase
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