Question

I need B.

DeZurik Corp. had the following stockholders’ equity section in its June 30, 2020, balance sheet (in thousands, except share and per share amounts):

	June 30 (in thousands)
	2020				2019
Paid-in capital:
$5.50 Preferred stock, $ ? par value, cumulative, 200,000 shares authorized, 96,000 shares issued and outstanding					$	3,840
Common stock, $5 par value, 4,000,000 shares authorized, 3,380,000 shares issued, 3,000,000 shares outstanding
Additional paid-in capital on common stock						27,040
Retained earnings
Less: Treasury common stock, at cost, ? shares
Total stockholders' equity	$	66,912			$	60,494

The transactions affecting the stockholders’ equity accounts of DeZurik Corp. for the year ended June 30, 2020, are summarized here:

1. 320,000 shares of common stock were issued at $15.30 per share.
2. 80,000 shares of treasury (common) stock were sold for $19.0 per share.
3. Net income for the year was $1,380 (in thousands).
4. The fiscal 2020 preferred dividends were paid in full. Assume that all 96,000 shares were outstanding throughout the year ended June 30, 2020.
5. A cash dividend of $0.25 per share was declared and paid to common stockholders. Assume that transactions (1) and (2) occurred before the dividend was declared.
6. The preferred stock was split 2 for 1 on June 30, 2020. (Note: This transaction had no effect on transaction 4.)

Required:
a-1. Record the effect of transactions 1-6 in journal entry format.
a-2. Calculate the dollar amounts that DeZurik Corp. would report for each stockholders’ equity caption on its June 30, 2020, balance sheet, after recording the effects of transactions 1-6. Also the treasury stock was purchased at $19.0.
b. Indicate how the stockholders’ equity caption details for DeZurik Corp. would change for the June 30, 2020, balance sheet, as compared to the disclosures for the 2019 balance sheet.
c. What was the average issue price of common stock shown on the June 30, 2020, balance sheet?

Required: G-1. Record the effect of transactions 1-6 in journal entry format. a-2. Calculate the dollar amounts that DeZurik Corp. would report for each stockholders' equity caption on its June 30, 2020, balance sheet, after recording the effects of transactions 1-6. Also the treasury stock was purchased at $19.0. b. Indicate how the stockholders' equity caption details for DeZurik Corp. would change for the June 30, 2020. balance sheet, as compared to the disclosures for the 2019 balance sheet. c. What was the average issue price of common stock shown on the June 30, 2020. balance sheet? Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B Required c Indicate how the stockholders' equity caption details for DeZurik Corp. would change for the June 30, 2020, balance sheet, as compared to the disclosures for the 2019 balance sheet. (Round the preferred stock values in dollars, rounded to 2 decimal places. (e.g., 32.16). Do not enter answer in thousands.) shares authorized Preferred stock par value, cumulative shares issued and outstanding. Common stock $5 par value 4.000.000 shares authorized shares outstanding Treasury common stock, at cost, shares. I shares issued < Required A2 Required c >

Answer 1

B.

Preferred stock

$40

Par value,cumulative.

200000

Shares authorized,

192000

Shares issued and outstanding

Common stock

$5

Par value

4000000

Shares authorized,

3700000

Shares issued

3080000

Shares outstanding

Treasury common stock,at cost,

300000

Shares

Note:1

For Preferred stock

Par value as on june 30,2019=Total preferred stock value as on June 30,2019/Shares issued and outstanding as on June 30,2019=3840000/96000=$ 40

In 2020,Preferred stock was split in 2 for 1

So,Par value will be half and Shares issued and outstanding will double

Par value as on june 30,2020=40*0.5=$ 20

Shares issued and outstanding=96000*2=192000

Note:2

For Common stock

Shares issued as on June 30,2020:

Shares

Beginning balance

3380000

Add:Shares issued

320000

Shares issued as on June 30,2020

3700000

Shares outstanding as on June 30,2020:

Shares

Beginning balance

3000000

Add:

Shares issued

320000

Treasury stock sold

80000

400000

Shares issued as on June 30,2020

3400000

Note:3

For Treasury stock

Shares

Shares issued

3700000

Less: shares outstanding

3400000

Number of treasury stock

300000