The Stockholders Equity section of the December 31, 2014, balance sheet of Eldon
ID: 2649053 • Letter: T
Question
The Stockholders Equity section of the December 31, 2014, balance sheet of Eldon Company appeared as follows:
Preferred stock, $30 par value, 5,000 shares authorized, ? shares issued
$120,000
Common stock, ? par, 10,000 shares authorized, 7,000 shares issued
70,000
Additional paid-in capitalPreferred
6,000
Additional paid-in capitalCommon
560,000
Additional paid-in capitalTreasury stock
1,000
Total contributed capital
_______________________
$757,000
Retained earnings
$40,000
Less: Treasury stock, preferred, 100 shares
(3,200)
Total stockholders equity
____________________________
$ ?
Required
Determine the following items based on Eldons balance sheet.
1. The number of shares of preferred stock issued
2. The number of shares of preferred stock outstanding
3. The average per-share sales price of the preferred stock when issued
4. The par value of the common stock
5. The average per-share sales price of the common stock when issued
6. The cost of the treasury stock per share
7. The total stockholders equity
8. The per-share book value of the common stock assuming that there are no dividends in arrears and that the preferred stock can be redeemed at its par value
Preferred stock, $30 par value, 5,000 shares authorized, ? shares issued
$120,000
Common stock, ? par, 10,000 shares authorized, 7,000 shares issued
70,000
Additional paid-in capitalPreferred
6,000
Additional paid-in capitalCommon
560,000
Additional paid-in capitalTreasury stock
1,000
Total contributed capital
_______________________
$757,000
Retained earnings
$40,000
Less: Treasury stock, preferred, 100 shares
(3,200)
Total stockholders equity
____________________________
$ ?
Explanation / Answer
1. the number of shares of preferred stock issued= 120,000/$30= 4000 stocks
2. the outstanding preferred stock = 5000- 4000= 1000(authorised - issued)
3.average prefered capital= 120,000/5000=$24
4. par value of common stock= 70,000/7000= $10
5. the average price of common stock= 70,000/10,000= $7
6. cost of treasury stock per share= 1000/100= $10
7. total stock holders equity= $793,800
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