The stockholders\' equity section of Velcro World is presented here. VELCRO WORL

Question

The stockholders' equity section of Velcro World is presented here. VELCRO WORLD Balance Sheet (partial) ($ in thousands) Stockholders' equity: Preferred stock, $1 par value $ 4,100 Common stock, $1 par value 22,000 Additional paid-in capital 584,000 Total paid-in capital 610,100 Retained earnings 294,000 Treasury stock, 10,000 common shares (170,000) Total stockholders' equity $ 734,100 Based on the stockholders' equity section of Velcro World, answer the following questions. Remember that all amounts are presented in thousands.

If the common shares were issued at $17 per share, at what price per share were the preferred shares issued?

4.  

If retained earnings at the beginning of the period was $232 million and $21 million was paid in dividends during the year, what was the net income for the year? (Enter your answer in millions.)

1. How many shares of preferred stock have been issued? 2. How many shares of common stock have been issued?
3.

If the common shares were issued at $17 per share, at what price per share were the preferred shares issued?

4.  

If retained earnings at the beginning of the period was $232 million and $21 million was paid in dividends during the year, what was the net income for the year? (Enter your answer in millions.)

Explanation / Answer

1)
$14,000 / $1 par value = 14,000 common shares issued
$15 Additional paid-in capital, common stock x 14,000 = $210,000 total common additional paid-in capital.
575,000 - 210,000 = $365,000 preferred additional paid-in capital
(365,000 + 5,400) / 5,400 = $69 issue price for preferred shares.

2)
Beg. Balance + Net income - Dividends = End. Balance
226,000,000 + Net income - 23,000,000 = 286,000,000
Net income = $83,000,000

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