The market price of a share of common stock at the time of issuance was $13.00,

ID: 2462860 • Letter: T

Question

The market price of a share of common stock at the time of issuance was $13.00, while the market price of a preferred share of stock at the time of issuance was $22.50. The company paid $7.50 per share for its treasury stock. Required: Determine the missing amount in the stockholders' equity section of the balance sheet set forth below. (Input all amounts as positive values.)

Stockholders' Equity Preferred Stock, $2 par value, authorized 1,000,000 shares; issued 350,000 shares Additional Paid-In Capital Common Stock, $3 par value, authorized 40,000,000 shares; issued 12,500,000 shares Additional Paid-In Capital Retained Earning 206,183,000 Less: Treasury Stock, at Cost (10,000 shares) Total Stockholders' Equity

Explanation / Answer

Stockholders' Equity

Preferred Stock, $2 par value, authorized 1,000,000 shares; issued 350,000 shares (350000*$2)

$ 700,000

Additional Paid-In Capital (350000* (22.50 - 2)

$ 7,175,000

Common Stock, $3 par value, authorized 40,000,000 shares; issued 12,500,000 shares (12500000*$3)

$ 37,500,000

Additional Paid-In Capital (12500000*(13-3)

$ 125,000,000

Retained Earning

$ 206,183,000

$ 376,558,000

Less: Treasury Stock, at Cost (10,000 shares*$7.50)

$ 75,000

Total Stockholders' Equity

$ 376,483,000