Problem 8-23 Analyzing the stockholders equity section of thebalance sheet LO 8-4, 8-7
The stockholdersâ equity section of the balance sheet for GatorCompany at December 31, 2014, is as follows:
Stockholdersâ Equity
Paid-in capital
Preferred stock, ? par value, 6%cumulative,
250,000 sharesauthorized, 55,000 shares issued
and outstanding $550,000
Common stock, $20 stated value,300,000 shares
authorized, 55,000 sharesissued and ? outstanding 1,100,000
Paid-in capital in excess ofparâPreferred 45,000
Paid-in capital in excess of statedvalueâCommon 165,000
Total paid-in capital 1,860,000
Retained earnings 400,000
Treasury stock, 8,000 shares (40,000 )
Total stockholdersâ equity $ 2,220,000
Note: The market value per share of the common stock is $40, andthe market value per share of the preferred stock is $27.
Required
a. What is the par value per share of the preferredstock?
b. What is the dividend per share on the preferred stock? (Roundyour answer to 2 decimal places.)
c. What is the number of common stock sharesoutstanding?
d.
What was the average issue price per share (price for which thestock was issued) of the common stock? (Round your answer to 2decimal places.)
f.
If Gator declared a 2-for-1 stock split on the common stock, howmany shares would be outstanding after the split? What amount wouldbe transferred from the Retained Earnings account because of thestock split? Theoretically, what would be the market price of thecommon stock immediately after the stock split?
Problem 8-23 Analyzing the stockholders equity section of thebalance sheet LO 8-4, 8-7
The stockholdersâ equity section of the balance sheet for GatorCompany at December 31, 2014, is as follows:
Stockholdersâ Equity
Paid-in capital
Preferred stock, ? par value, 6%cumulative,
250,000 sharesauthorized, 55,000 shares issued
and outstanding $550,000
Common stock, $20 stated value,300,000 shares
authorized, 55,000 sharesissued and ? outstanding 1,100,000
Paid-in capital in excess ofparâPreferred 45,000
Paid-in capital in excess of statedvalueâCommon 165,000
Total paid-in capital 1,860,000
Retained earnings 400,000
Treasury stock, 8,000 shares (40,000 )
Total stockholdersâ equity $ 2,220,000
Note: The market value per share of the common stock is $40, andthe market value per share of the preferred stock is $27.
Required
a. What is the par value per share of the preferredstock?
b. What is the dividend per share on the preferred stock? (Roundyour answer to 2 decimal places.)
c. What is the number of common stock sharesoutstanding?
d.
What was the average issue price per share (price for which thestock was issued) of the common stock? (Round your answer to 2decimal places.)
f.
If Gator declared a 2-for-1 stock split on the common stock, howmany shares would be outstanding after the split? What amount wouldbe transferred from the Retained Earnings account because of thestock split? Theoretically, what would be the market price of thecommon stock immediately after the stock split?
Related questions
| The stockholdersâequity section of Birdman Corp.âs balance sheet at December 31 ispresented here. | |||||||
| Birdman Corp. | |||||||
| Balance Sheet (partial) | |||||||
| Stockholdersâ equity | |||||||
| Paid-incapital | |||||||
| Preferred stock, cumulative,10,000 shares authorized, 6,000 shares issued and outstanding | $ 640,000 | ||||||
| Common stock, no par, 735,776shares authorized, 569,000 shares issued | 2,400,000 | ||||||
| Totalpaid-in capital | 3,040,000 | ||||||
| Retainedearnings | 1,191,000 | ||||||
| Total paid-incapital and retained earnings | 4,231,000 | ||||||
| Less:Treasury stock (5,200 common shares) | 30,933 | ||||||
| Total stockholdersâequity | $4,200,067 | ||||||
| From a review of thestockholdersâ equity section, answer the following questions: | |||||||
| (a) How many shares of commonstock are outstanding? | |||||||
| Common stock outstanding | shares | ||||||
| (b) Assuming there is a statedvalue, what is the stated value of the common stock? | |||||||
| The stated value of the commonstock | per share | ||||||
| (c) What is the par value ofthe preferred stock? | |||||||
| The par value of the preferredstock | per share | ||||||
| (d) If the annual dividend onpreferred stock is $57,600, what is the dividend rate on preferredstock? | |||||||
| The dividend rate | % | ||||||
| (e) If dividends of $74,800were in arrears on preferred stock, what would be the balancereported for retained earnings? | |||||||
| The Retained Earningsbalance | |||||||
Problem 15-3
Hatch Company has two classes of capital stock outstanding: 7%,$20 par preferred and $5 par common. At December 31, 2014, thefollowing accounts were iHatch Company has two classes of capitalstock outstanding: 7%, $20 par preferred and $5 par common. AtDecember 31, 2014, the following accounts were included instockholdersâ equity.
| Preferred Stock, 151,800 shares | $ 3,036,000 | |
| Common Stock, 2,120,000 shares | 10,600,000 | |
| Paid-in Capital in Excess of ParâPreferred Stock | 203,700 | |
| Paid-in Capital in Excess of ParâCommon Stock | 27,240,000 | |
| Retained Earnings | 4,547,000 |
The following transactions affected stockholdersâ equity during2015.
| Jan. 1 | 40,300 shares of preferred stock issued at $22 per share. | |
| Feb. 1 | 53,500 shares of common stock issued at $21 per share. | |
| June 1 | 2-for-1 stock split (par value reduced to $2.50). | |
| July 1 | 39,700 shares of common treasury stock purchased at $9 pershare. Hatch uses the cost method. | |
| Sept. 15 | 10,600 shares of treasury stock reissued at $11 per share. | |
| Dec. 31 | The preferred dividend is declared, and a common dividend of55¢ per share is declared. | |
| Dec. 31 | Net income is $2,279,000. |
Prepare the stockholdersâ equity section for Hatch Company atDecember 31, 2015.
