Early in 2013, Feller Corporation was formed with authorization to issue 50,000

ID: 2492583 • Letter: E

Question

Early in 2013, Feller Corporation was formed with authorization to issue 50,000 shares of $1 par value common stock. All shares were issued at a price of $8 per share. The corporation reported net income of $95,000 in 2013, $27,500 in 2014, and $75,700 in 2015. No dividends were declared in any of these three years.

In 2014, the company purchased its own shares for $35,000 in the open market. In 2015, it reissued all of its treasury stock for $40,000.

Prepare the stockholders’ equity section of the balance sheet at December 31, 2015. Include a supporting schedule showing your computation of retained earnings at the balance sheet date. (Hint: Income increases retained earnings.)

As of December 31, compute the company’s book value per share of common stock. (Round your answer to 2 decimal places.)

Explanation / Answer

Answer a. Balance Sheet- Extract

Answer b.
Company's Book value per share = Total Stockholders' Equity / No. of shares Outstanding
= 603,200 / 50,000 = $12.06

Stockholders' Equity Common Stock, $1par, 50,000 shares authorized, issued and outstanding $ 50,000 Additional paid-In Capital : Common $ 350,000 Adiitional Paid-In Capital: Treasury Stock $ 5,000 Total Paid-In Capital $ 405,000 Retained Earnings* $ 198,200 Total Stockholders' Equity $ 603,200 *Computaion of Retained Earnings as on December 31, 2015: Net Income in 2013 $ 95,000 Net Income in 2014 $ 27,500 Net Income in 2015 $ 75,700 Retained Earnings, December 31,2015 $ 198,200

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Early in 2013, Feller Corporation was formed with authorization to issue 50,000

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