Kilgore Auto Parts reported the following information at December 31, 2004 How m
ID: 2500477 • Letter: K
Question
Kilgore Auto Parts reported the following information at December 31, 2004 How many shares of common stock are issued? How many shares of preferred stock are issued? How many shares of common stock are outstanding? What was the average price paid for the treasury shares when the company reaquired them? What is the dividend PER SHARE that preferred shareholders are entitled to when a dividend is declared? What was the average price of common shares when they were issued? If a 45% stock dividend were issued, by how much would the total stockholders' equity balance change?Explanation / Answer
1)
Common Stock
No of share issued = Common Stock Value/Par value
No of share issued = 10000/2.5
No of share issued = 4000
2)
Preferred Stock
No of share issued = Preferred Stock Value/Par value
No of share issued = 60000/24
No of share issued = 2500
3)
Common Stock
No of share outstanding = No of share issued - No of stock in treasury stock
No of share outstanding = 4000-100
No of share outstanding = 3900
4)
Average Price paid for treasury stock = Treasury Stock/No of treasury stock
Average Price paid for treasury stock = 5000/100
Average Price paid for treasury stock = $ 50
5)
Dividend per share for preferred stock = Par Value*Dividend %
Dividend per share for preferred stock = 24*10%
Dividend per share for preferred stock = 2.40
6)
Average Price of Common Stock at the time of issue = (Common Stock Value+ Additional paid in capital)/No of stock issued
Average Price of Common Stock at the time of issue = (10000+30000)/4000
Average Price of Common Stock at the time of issue = $ 10
7)
If stock dividend declared than Retained Earning is transfered to Common stock & Additional Paid in capital, In total stockholders equity balance would not be affected
Therefore,
Total stockholders equity balance changes = 0
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