**Common Stock Accounting Questions**The following is a balance sheet caption for common stock:**Common stock**- No par value- 15,000,000 shares authorized,- 9,200,000 shares issued,- 8,900,000 shares outstanding**Value:** $1,104,000,000**Required:**a) Calculate the average price at which the shares were issued.b) If these shares had been assigned a stated (par) value of $10 each, show how the above caption would be different.c) Calculate the total amount of cash that would be paid to stockholders if a cash dividend of $1.50 per share were declared.**Instructions for Calculations:**a) **Average Price Calculation:** To find the average price per share at which the shares were issued, divide the total value of the issued shares by the number of shares issued. Formula: \[ \text{Average Price per Share} = \frac{\text{Total Value of Issued Shares}}{\text{Number of Shares Issued}} \] Calculation: \[ \text{Average Price per Share} = \frac{1,104,000,000}{9,200,000} \approx \$120 \]b) **Caption Difference with Par Value:** If the shares had a stated (par) value of $10 each, the caption would include this detail and be structured to show par value and any additional paid-in capital. Example of Caption with Par Value: ``` Common stock, $10 par value, 15,000,000 shares authorized, 9,200,000 shares issued, 8,900,000 shares outstanding Common Stock at Par Value (9,200,000 * $10) $92,000,000 Additional Paid-in Capital $1,012,000,000 Total $1,104,000,000 ```c) **Cash Dividend Calculation:** To find the total amount of cash paid to stockholders for a $1.50 per share dividend, multiply the dividend per share by the number of shares outstanding. Formula: \[ \text{Total Dividend Payment} = \text{Dividend per Share} \times \text{Number of Shares Outstanding} \] Calculation: \[ \text

Common stock is a type of stock that shows the Ownership of the stockholder in the company. These…

Answered: The balance sheet caption for common…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

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Required information [The following information applies to the questions displayed below.] The stockholders' equity section of Velcro World is presented here. VELCRO WORLD Balance Sheet (partial). ($ and shares in thousands) Stockholders' equity: Preferred stock, $1 par value Common stock, $1 par value Additional paid-in capital Total paid-in capital $ 4,300 13,000 293,600 310,900 271,000 (180,000) Retained earnings Treasury stock, 12,000 common shares Total stockholders' equity $ 401,900 Based on the stockholders' equity section of Velcro World, answer the following questions. Remember that all amounts are presented in thousands. 4. If retained earnings at the beginning of the period was $233 million and $13 million was paid in dividends during the year, what was the net income for the year? (Enter your answer in million (i.e., 5,000,000 should be entered as 5).) Net income million
Ben and Eric are opening a comic bookstore to be registered as E&B Comic Bookstore Co. There is no other competing comic bookstore in the area. Their fundamental decision is how to organize the business and they anticipate a substantial profit in the first year, with the ability to sell franchises in the future. Although they have enough to start the business now as a partnership, cash flow will be an issue as they grow. They feel the corporate form of operation will be best for the long term. They seek your advice. Requirements 1. What is the main advantage they gain by selecting a corporate form of business now? 2. Distinguish between par value and issue price. 3. If they decide to issue $1 par common stock and anticipate an initial market price of $80 per share, how many shares will they need to issue to raise $4,000,000? 4. The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that…
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Issued ___ (please refer to table below and use only the info in line with your fist name initial) shares of $___ (please refer to table below and use only the info in line with your fist name initial) par value preferred stock. Shares were issued at par. 23,000 $16
Required information [The following information applies to the questions displayed below.] The stockholders' equity section of Velcro World is presented here. VELCRO WORLD Balance Sheet (partial) ($ and shares in thousands) Stockholders' equity: Preferred stock, $1 par value Common stock, $1 par value Additional paid-in capital Total paid-in capital Retained earnings Treasury stock, 11,000 common shares Total stockholders' equity $6,000,000 30,000,000 1,164,000,000 1,200,000,000 288,000,000 (352,000,000) $1,136,000,000 Based on the stockholders' equity section of Velcro World, answer the following questions. Remember that all amounts are presented in thousands. 5. What was the average cost per share of the treasury stock acquired? Average cost per share
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Required information [The following information applies to the questions displayed below.] The stockholders' equity section of The Seventies Shop is presented here. THE SEVENTIES SHOP Balance Sheet (partial) ($ 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 $0 13,000 28,600 Number of shares 41,600 46,000 (2,300) $85,300 Based on the stockholders' equity section of The Seventies Shop, answer the following questions. Remember that all amounts are presented in thousands. 5. If the treasury stock was purchased at $16 per share, how many shares were purchased? (Enter your answer in total number of shares, not in thousands.)
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