Question

Problem 10-4B Analyze the stockholders' equity section

YULUI Problem 10-4B Analyze the stockholders' equity section (LO10-7) The following information applies to the questions displayed below The stockholders' equity section of The Seventies Shop is presented here. THE SEVENTIES SHOP Balance sheet (partial) ($ in thousands) Stockholders' equity: Preferred stock, $50 par value Common stock, $5 par value Additional paid in capital Total paid-in capital Retained earnings Treasury stock Total stockholders' equity $ 15,000 45,000 60,000 48,000 (2,700) $105,300 Based on the stockholders' equity section of The Seventies Shop, answer the following questions. Remember that all amounts are presented in thousands Problem 10-4B Part 1 Required: 1. How many shares of preferred stock have been issued? (Enter your answer in total number of shares, not in thousands.) Number of shares

Answer 1

Solution a:

Number of preferred share = $0 / $50 = 0

Solution b:

Number of Common shares = Common stock / Par value per share = $15,000,000 / $5 = 3,000,000 shares

Solution c:

Common shares issued at average price = Total paid in capital / Number of Common shares

= $60,000,000 / 3,000,000 = $20 per share

Solution d:

Dividend paid = Beginning retained earnings + Net income - Ending Retained earnings

= $40,000,000 + $10,850,000 - $48,000,000 = $2,850,000

Solution e:

Number of treasury shares = $2,700,000 / $18 = 150,000 shares

Solution f:

Dividend per share = $2,850,000 / (3,000,000 - 150,000) = $1 per share