PA11-3 Finding Missing Amounts LO 11-2, 11-3, 11-5 At December 31, the records o
ID: 2569113 • Letter: P
Question
PA11-3 Finding Missing Amounts LO 11-2, 11-3, 11-5 At December 31, the records of Kozmetsky Corporation provided the following selected and incomplete data: Common stock (par $2, no changes during the current year) Shares authorized, 5,000,000 Shares issued,-2-issue price $8 per share. Shares held as treasury stock, 10,000 shares, cost $6 per share Net income for the current year, $481,000 Common Stock account, $150,000 Dividends declared and paid during the current year, $2 per share Retained Earnings balance, beginning of year, $800,000 Required: I. Complete the following Shares issued Shares outstanding The balance in Additional Paid-in Capital would be s___ 2, ings per share is SRound your answer to two decimal places. 4. Total dividends paid on common stock during the current year is 5. Treasury stock should be reported in the stockholders' equity section of the balance sheet in the amount of S- Assume that the board of directors voted a 2-for-I stock split. After the stock splt, the par value per share will be SExplanation / Answer
1 a. Shares issued: 75,000 shares
(Common stock Account / par value = $150,000 / $2 = 75,000 shares)
1b. Shares outstanding: 65,000 shares
(shares issued – shares in treasury stock ) ( 75,000 – 10,000 = 65,000 shares)
2. The balance in the Additional paid-in capital account would be $ 450,000
(issue price – par value) X shares issued =( $8 - $2) = $6 X 75,000 = $450,000
3. Earnings per share is : $ 7.4
[(Net income / shares outstanding) ($481,000 / 65,000) = $7.4]
4. Total dividends paid on common stock during the current year is $ $130,000
(Dividends declared and paid during the current year $2 per share X share outstanding)
($2 X 65,000) = $130,000
5. Earning per share is $7.4
(net income for the current year / shares outstanding) ($481,000 / 65,000) = $7.4
6. Assume that the board of directors voted a 2-for -1 stock split. After the stock split, the par value per share will be $ 1
(share par value / 2) ($2 / 2 = $1)
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