(7 points) Preferred stock, 10%, $24 par value, cumulative Common stock, $2.50 p
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Question
(7 points) Preferred stock, 10%, $24 par value, cumulative Common stock, $2.50 par value Additional paid-in capital-Common stock Retained earnings 3. Kilgore Auto Parts reported the following information at Dec ember 31, 2004 $60,000 10,000 30,000 50,000 150,000 15.000) $145,000 Total contributed capital and retained earnings Less: Treasury stock (100 shares common stock at cost) Total stockholders' equity 1. How many shares of common stock are issued? 2. How many shares of preferred stock are issued? 3. How many shares of common stock are outstanding? 4. 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? 5. 6. 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 bala change? 7.Explanation / Answer
Answer 1
Number of shares of common stock issued = Common stock amount / Par value = $10000 / $2.50 = 4,000 shares
Answer 2
Number of shares of Preferred stock issued =Preferred stock amount / Par value = $60000 / $24 = 2,500 shares
Answer 3
Number of Shares of Common stock ountstanding = Number of shares of common stock issued - Number of shares in treasury stock = 4,000 shares - 100 shares = 3,900 shares
Answer 4
The average price paid for the treasury shares = Treasury stock (amount) / Number of shares in treasury stock
= $5,000 / 100 shares = $50
Answer 5
Dividend PER SHARE that preferred shareholders are entitled to get = Par value of preferred stock * 10 %
= $24*10 % = $2.40
Answer 6
The average price of common shares when they were issued = ( Common stock (amount) + Additional paid in capital) / Number of shares of common stock issued = ($10000 + $30000) / 4,000 = $10
Answer 7
No change in total stockholder 'sequity balance when 45% stock dividend were issued.
Explanation : When a stock dividend is issued the equivalent dividend amount is tranfer from retained earnings to common stock & additional paid in capital respectively . Thus there is no change in total stock holder's equity balance as such
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