Question

please answer a - f and explain please

cercises i Saved Help CREIGHTON COMPANY As of December 31, 2018 Stockholders' equity Preferred stock, $10 stated value, 78 cumulative, 300 shares authorized, 50 issued and outstanding Common stock, $10 par value, 250 shares authorized, 100 issued and outstanding Common stock, class B, $20 par value, 400 shares authorized, 150 issued and outstanding Common stock, no par, 150 shares authorized, 100 issued and outstanding Paid-in capital in excess of stated value-preferred Paid-in capital in excess of par value-common Paid-in capital in excess of par value-class B common Retained earnings Total stockholders' equity $ 500 1,000 3,000 2,200 600 1,200 750 7,000 $ 16,250 Required a. Assuming the preferred stock was originally issued for cash, determine the amount of cash that was collected when the stock was issued. b. Based on the class B common stock alone, determine the amount of the company's legal capital. c. Based on the class B common stock alone, determine the minimum amount of assets that must be retained in the company as protection for creditors. d. Determine the number of shares of class B common stock that are available to sell as of December 31, 2018 e. Assuming Creighton purchases treasury stock consisting of 25 shares of its no par common stock on January 1, 2019, determine the amount of the no-par common stock that would be outstanding Immediately after the purchase f. Based on the stockholders' equity section shown above, can you determine the market value of the preferred stock? a. Amount of cash collected b. Legal capital c. Minimum amount of assets d. Number of shares e. No-par common stock + ondermine the most a fthanefndar

Answer 1

As per HOMEWORKLIB RULES, first 4 sub-parts of the question will be answered.

a. Amount of cash collected = $1100

Preferred stock at stated value = $500

Preferred stock in excess of stated value = $600

Total cash collected on issue of preference stock = $1100

b. Legal Capital = $3000

Legal capital is the par value of common stock and stated value of preference stock that has been issued. Based on the class B common stock alone, the amount of company's legal capital will be the 150 shares issued at par at the rate $20 :

150 x $20 = $3000

c. Minimum amount of assets = $3000

Based on the class B common stock alone, the legal capital has to be the minimum amount of asset that must be retained in the company as protection for creditors.

d. Number of shares = 250 shares

As of December 31, 2018, out of 400 shares authorised, 150 shares has been already issued. Remaining shares that can be sold is 400-150 = 250 shares.