Required information
E11-4 (Algo) Reporting Stockholders' Equity LO11-1, 11-2, 11-3
[The following information applies to the questions displayed below.]
The financial statements for Highland Corporation included the following selected information:
Common stock | $ | 1,030,000 |
Retained earnings | $ | 760,000 |
Net income | $ | 1,050,000 |
Shares issued | 103,000 | |
Shares outstanding | 70,000 | |
Dividends declared and paid | $ | 650,000 |
The common stock was sold at a price of $27 per share.
1. What is the amount of additional paid-in capital?
2. What was the amount of retained earnings at the beginning of the year?
3. How many shares are in treasury stock?
4. Compute earnings per share. (round to 2 decimal places)
Solution 1:
Amount of additional paid-in capital = (Shares issued *issue price) - Common stock
= (103000*$27) - $1030000 = $1,751,000
Solution 2:
Retained earnings at the beginning of the year = Retained earnings at the End of the year - Net income + Dividend
= $760000 - $1050000 + $650000 = $360,000
Solution 3:
Shares in treasury stock = Shares issued - Shares outstanding = 103000 - 70000 = 33,000 shares
Solution 4:
Earnings per share = Net income / shares outstanding = $1050000/ 70000 = $15 per share
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