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Problem 8-25 The stockl s as tollows.qty nalyzing the stockholders equity section of the balance sheet bolders equity section of the balance sheet for Mann Equipment Co. at December 31, 2016, LO 8-2, 8-4, 8-5, 8-7 by stockholdersEquity -in capital Paid-dered stock, ? par value, 6% cumulative, CHECK FIGURES a. Par value per share: $20 b. Dividend per share: $1.20 100,000 shares authorized. 10,000 shares issued and outstanding ommon stock, $10 stated value, 200,000 shares s 200,000 authorized, 100,000 shares issued and ?? shares outstanding The Paid in capital in excess of par-Preferred 1,000,000 25,000 500,000 Paid-in capital l in excess of stated value-Common Tokal paid-in capital Retained earnings Treasury stock, 1,000 shares Total stockholders equity $1,725,000 420,000 13,000 $2,132,000 ing he Note: The market value per share of the common stock is $42, and the market value per share of the preferred stock is $26. Required a. What is the par value per share of the preferred stock? b. What is the dividend per share on the preferred stock? c. What is the number of common stock shares outstanding? d. What was the average issue price per share (price for which the stock was issued) of the common stock? e. Explain the difference between the average issue price and the market price of the common stock. t. If Mann Equipment Company declared a 2-for-I stock split on the common stock, how many shares would be outstanding after the split? What amount would be transferred from the Retained Earnings account because of the stock splite Theoretically, what would be the market price of the common stock immediately after the stock split?

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Answer #1

Answer (a)

Par Value per share of preferred stock :-

= issued & O/s Capital ÷ No of issued & O/s shares

= $ 2,00,000 ÷ 10000 shares

  = $ 20 per share

Answer (b) Dividend Per share on prefered stock:-

DPS = Paid up value per share × dividend rate

= $ 20 × 6%

= $ 1.20 per share

Answer (c) Number of commom stock shares o/s:-

   = Issued & O/s shares capital ÷ Paid up value per share

= $ 10,00,000 ÷ $ 10

= 1,00,000 shares

Answer (d) Average issue price per share of common stock :-

= total paidup capital common stock÷total issued & o/s share

= $ 15,00,000 ÷ 1,00,000 shares

= $ 15 per share

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