PROBLEM 11.9BReporting Stockholders'Equity with Treasury Stockand Stock SplitsLO11-4, LO11-5, LO11-7,LO11-8, L011-9Early in 2017, Laird Industries was formed with authorization to issue 150,000 shares of $20 parvalue common stock and 10,000 shares of $100 par value cumulative preferred stock. During 2017.all the preferred stock was issued at par, and 80,000 shares of common stock were sold for $35 pershare. The preferred stock is entitled to a dividend equal to 6 percent of its par value before anydividends are paid on the common stock.During its first five years of business (2015 through 2021), the company earned incometotaling $3,800,000 and paid dividends of 60 cents per share each year on the common stockoutstanding.On January 2, 2019, the company purchased 1,000 shares of its own common stock in the openmarket for $40,000. On January 2, 2021, it reissued 600 shares of this treasury stock for $30,000.The remaining 400 shares were still held in treasury at December 31, 2021.Instructionsa. Prepare the stockholders' equity section of the balance sheet at December 31, 2021Include a supporting schedule showing (1) your computation of any paid-in capital ontreasury stock and (2) retained earnings at the balance sheet date. (Hint: Income increasesretained earnings, whereas dividends reduce retained earnings. Dividends are not paid onshares of stock held in treasury.).b.As of December 31, 2021, compute the company's book value per share of common stock.(Hint: Book value per share is computed only on the shares of stock outstanding.)c.At December 31, 2021, shares of the company's common stock were trading at $56.Explain what would have happened to the market price per share had the company splitits stock 2-for-1 at this date. Also explain what would have happened to the par value ofthe common stock and to the number of common shares outstanding.

Stockholders' equity is the assets remaining in an entity after all liabilities have been paid. It…

Answered: stockholders' equity section of the…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

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Chapter11: Stockholders' Equity

Section: Chapter Questions

Problem 11.6E

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Problem 11.2A (Static) Stockholders' Equity Section (LO11-4, LO11-5, LO11-6) McMinn Publications was organized early in 2019 with authorization to issue 20,000 shares of $100 par value preferred stock and 1 million shares of $1 par value common stock. All of the preferred stock was issued at par, and 300,000 shares of common stock were sold for $20 per share. The preferred stock pays a 10 percent cumulative dividend. During the first five years of operations (2019 through 2023) the corporation earned a total net income of $4,560,000 and paid dividends of $1 per share each year on the common stock. In 2024, however, the corporation reported a net loss of $1,825,000 and paid no dividends. Required: a. Prepare the stockholders' equity section of the balance sheet at December 31, 2024. c. Do the dividends in arrears appear as a liability of the corporation as of the end of 2024? Complete this question by entering your answers in the tabs below. Required A Required C Prepare the…
Exhibit 15-9Groundcover, Inc. had never had a treasury stock transaction prior to 2016. It experienced the following treasury stock transactions during 2016: 4/1/2016: Reacquired 1,000 shares of its own $5 par common stock, originally sold at $12 a share, for $10 a share. This was the first time that Groundcover had reacquired its own stock. 4/8/2016: Reissued 400 shares at $8 a share. 5/2/2016: Reissued 500 shares at $13 a share. 5/10/2016: Retired the remaining 100 shares. Assume the cost method is used.Refer to Exhibit 15-9. The entry to record the reissuance of 400 shares on 4/8/2016 would include a A. credit to Treasury Stock for $3,200 B. credit to Additional Paid-in Capital on Common Stock for $800 C. debit to Retained Earnings for $800 D. debit to Additional Paid-in Capital from Treasury Stock for $800
Exercise 10-7 (Algo) Record issuance of stock and treasury stock transactions (LO10-2, 10-3, 10-4) The Golden Mushroom has two classes of stock authorized: 9%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2024, its first year of operations: January 2 February 6 Issues 100,000 shares of common stock for $16 per share. Issues 1,100 shares of 9% preferred stock for $11 per share. September 10 Purchases 11,000 shares of its own common stock for $21 per share. December 15 Resells 5,500 shares of treasury stock at $26 per share. Required: Record each of these transactions. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet < 1 2 3 4 Record the issuance of 100,000 shares of common stock for $16 per share. Note: Enter debits before credits. Date General Journal Debit Credit 13
Analysis of Stockholders' Equity The Stockholders' Equity section of the December 31, 2017, balance sheet of Eldon Company appeared as follows: Preferred stock, $50 par value, 5,000 shares authorized, ? shares issued $300,000 Common stock, ? par, 10,000 shares authorized, 7,000 shares issued 70,000 Additional paid-in capital—Preferred 10,800 Additional paid-in capital—Common 420,000 Additional paid-in capital—Treasury stock 2,000 Total contributed capital $802,800 Retained earnings 40,000 Treasury stock, preferred, 100 shares (3,500) Total stockholders’ equity $ ? Determine the following items based on Eldon's balance sheet. Round all calculations except per-share amounts to the nearest whole number; round per-share amounts to the nearest cent. 2. The number of shares of preferred stock outstandingfill in the blank = shares 3. The average per-share sales price of the preferred stock when issued$fill in the blank = per share The cost of the…
Exhibit 15-9Groundcover, Inc. had never had a treasury stock transaction prior to 2016. It experienced the following treasury stock transactions during 2016: 4/1/2016: Reacquired 1,000 shares of its own $5 par common stock, originally sold at $12 a share, for $10 a share. This was the first time that Groundcover had reacquired its own stock. 4/8/2016: Reissued 400 shares at $8 a share. 5/2/2016: Reissued 500 shares at $13 a share. 5/10/2016: Retired the remaining 100 shares. Assume the cost method is used.Refer to Exhibit 15-9. The entry to record the retirement of 100 shares on 5/10/2016 would include a debit to Common Stock for $1,200 debit to Treasury Stock for $1,000 debit to Additional Paid-in Capital on Common Stock for $1,200 credit to Additional Paid-in Capital from Treasury Stock for $200
Analysis of Stockholders' Equity The Stockholders' Equity section of the December 31, 2017, balance sheet of Eldon Company appeared as follows: Preferred stock, $50 par value, 5,000 shares authorized, ? shares issued $300,000 Common stock,? par, 10,000 shares authorized, 7,000 shares issued 70,000 Additional paid-in capital—Preferred 10,800 Additional paid-in capital—Common 420,000 Additional paid-in capital—Treasury stock 2,000 Total contributed capital $802,800 Retained earnings 40,000 Treasury stock, preferred, 100 shares (3,500) Total stockholders’ equity $ ? The per-share book value of the common stock assuming that there are no dividends in arrears and that the preferred stock can be redeemed at its par value$
Analysis of Stockholders' Equity The Stockholders' Equity section of the December 31, 2017, balance sheet of Eldon Company appeared as follows: Preferred stock, $50 par value, 5,000 shares      authorized, ? shares issued $300,000 Common stock,? par, 10,000 shares authorized,      7,000 shares issued 70,000 Additional paid-in capital—Preferred 10,800 Additional paid-in capital—Common 420,000 Additional paid-in capital—Treasury stock 2,000 Total contributed capital $802,800 Retained earnings 40,000 Treasury stock, preferred, 100 shares (3,500)       Total stockholders’ equity $? Required: Determine the following items based on Eldon's balance sheet. Round all calculations except per-share amounts to the nearest whole number; round per-share amounts to the nearest cent. 1. The number of shares of preferred stock issued= shares 2. The number of shares of preferred stock outstanding= shares 3. The average per-share sales price of the preferred stock when issued$…
Analysis of Stockholders' Equity The Stockholders' Equity section of the December 31, 2017, balance sheet of Eldon Company appeared as follows: Preferred stock, $50 par value, 5,000 shares      authorized, ? shares issued $275,000 Common stock, ? par, 10,000 shares authorized,      8,000 shares issued 80,000 Additional paid-in capital—Preferred 9,900 Additional paid-in capital—Common 480,000 Additional paid-in capital—Treasury stock 1,000 Total contributed capital $845,900 Retained earnings 49,000 Treasury stock, preferred, 100 shares (3,500)       Total stockholders’ equity $ 5. The average per-share sales price of the common stock when issued$fill in the blank ___ per share 6. The cost of the treasury stock per share$fill in the blank ___ per share The per-share book value of the common stock assuming that there are no dividends in arrears and that the preferred stock can be redeemed at its par value$fill in the blank ___ per share
Analysis of Stockholders' Equity The Stockholders' Equity section of the December 31, 2017, balance sheet of Eldon Company appeared as follows: Preferred stock, $50 par value, 5,000 shares      authorized, ? shares issued $275,000 Common stock, ? par, 10,000 shares authorized,      10,000 shares issued 100,000 Additional paid-in capital—Preferred 7,700 Additional paid-in capital—Common 800,000 Additional paid-in capital—Treasury stock 1,200 Total contributed capital $1,183,900 Retained earnings 43,000 Treasury stock, preferred, 100 shares (3,500)       Total stockholders’ equity $ ? Determine the following items based on Eldon's balance sheet. Round all calculations except per-share amounts to the nearest whole number; round per-share amounts to the nearest cent. 4. The par value of the common stock$fill in the blank 4 per share 5. The average per-share sales price of the common stock when issued$fill in the blank 5 per share 6. The cost of the treasury stock…
Analysis of Stockholders' Equity The Stockholders' Equity section of the December 31, 2017, balance sheet of Eldon Company appeared as follows: Preferred stock, $50 par value, 5,000 shares authorized, ? shares issued $300,000 Common stock, ? par, 10,000 shares authorized, 7,000 shares issued 70,000 Additional paid-in capital—Preferred 9,000 Additional paid-in capital—Common 630,000 Additional paid-in capital—Treasury stock 1,200 Total contributed capital $1,010,200 Retained earnings 46,000 Treasury stock, preferred, 100 shares (3,200) Total stockholders’ equity $ ? Required: Determine the following items based on Eldon's balance sheet. Round all calculations except per-share amounts to the nearest whole number; round per-share amounts to the nearest cent. 1. The number of shares of preferred stock issuedfill in the blank 1 shares 2. The number of shares of preferred stock outstandingfill in the blank 2 shares 3. The average per-share sales…
Problem 10-2A Record equity transactions and indicate the effect on the balance sheet equation (LO10-2, 10-3, 10-4, 10-5) [The following information applies to the questions displayed below.] Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common. As of the beginning of 2021, 450 shares of preferred stock and 5,500 shares of common stock have been issued. The following transactions affect stockholders' equity during 2021: March May July October 15 Issue 350 shares of preferred stock for $60 per share. December 1 Declare a cash dividend on both common and preferred stock of $2.00 per share to all stockholders of 1 Issue 2,600 shares of common stock for $57 per share. 15 Purchase 550 shares of treasury stock for $50 per share. 10 Resell 350 shares of treasury stock purchased on May 15 for $55 per share. record on December 15. (Hint: Dividends are not paid on treasury stock.) December 31 Pay the cash dividends declared on December 1. Donnie…
Analysis of Stockholders' Equity The Stockholders' Equity section of the December 31, 2017, balance sheet of Eldon Company appeared as follows: Preferred stock, $50 par value, 5,000 shares authorized, ? shares issued $275,000 Common stock, ? par, 10,000 shares authorized, 10,000 shares issued 100,000 Additional paid-in capital—Preferred 7,700 Additional paid-in capital—Common 800,000 Additional paid-in capital—Treasury stock 1,200 Total contributed capital $1,183,900 Retained earnings 43,000 Treasury stock, preferred, 100 shares (3,500) Total stockholders’ equity $ ? Required: Determine the following items based on Eldon's balance sheet. Round all calculations except per-share amounts to the nearest whole number; round per-share amounts to the nearest cent. 1. The number of shares of preferred stock issuedfill in the blank 1 shares 2. The number of shares of preferred stock outstandingfill in the blank 2 shares 3. The average per-share sales…

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