Question

Thomas Corporation

Balance Sheet (partial)

December 31, 2018

Stockholders' equity

              Paid-in-Capital

1) Preferred stock, 9%, $10 par value, 10,000 shares                         1._________

                          authorized, 5,000 shares issued and outstanding

                       Paid-In Capital in excess of par value – preferred                                     50,000

2) Common stock, $4 stated value, 50,000 shares

                          authorized, 40,000 shares issued, and 39,000                                2. ________                                         shares outstanding                                                                               _________   

                          Paid-In Capital in excess of stated value - common                               240,000

                                                                                                                                                                       

3) Total Paid-in-Capital                                                                   3._________

              4. _______________                                                                                           300,000  

              Treasury stock -Common (5. _______ shares)                                             6.     ______

              Total Stockholder’s Equity                                                                                  $795,000  

7. What price per share were the Preferred Stock sold for?   ________

8. What price per share were the Common Stock sold for?   ________

9. What price per share was paid for the Treasury Stock?   _________

10. How much will the total current year Preferred Stock dividend be? _______

Note: Assume all shares were issued at one time and all the shares repurchased occurred in a single transaction.

Answer 1

Answers

(1)	Preferred stock, 9%, $10 par value, 10,000 shares authorized, 5,000 shares issued and outstanding	$ 50,000 (1)
	Paid-In Capital in excess of par value – preferred	$ 50,000
(2)	Common stock, $4 stated value, 50,000 shares authorized, 40,000 shares issued, and 39,000 shares outstanding	$ 160,000 (2)
	Paid-In Capital in excess of stated value – common	$ 240,000
(3)	Total paid up Capital	$ 500,000 (3)
(4)	Retained Earnings (4)	$ 300,000
(5)	Less: Treasury Stock – Common (1000 shares) (5)	$ 5,000 (6)
	Total Stockholder’s Equity	$ 795,000

• Other Answers

--Answer #7: Price per share for preferred stock = ($50000 + 50000) / 5000 shares issued = $ 20 per share
--Answer #8: Price per share for common stock = ($160000 + 240000) / 40000 shares issued = $ 10 per share
--Answer #9: Price per share for Treasury Stock = $ 5000 / 1000 shares = $ 5 per share
-- Answer #10: Current year preferred stock dividend = 5000 shares issued x $ 10 x 9% = $ 4,500