The stockholders’ equity section of the balance sheet for Mann Equipment Co. at December 31, Year 1, is as follows:   Stockholders’ Equity             Paid-in capital             Preferred stock, ? par value, 5% cumulative, 260,000 shares authorized, 56,000 shares issued and outstanding $ 672,000         Common stock, $20 stated value, 310,000 shares authorized, 56,000 shares issued and outstanding   1,120,000         Paid-in capital in excess of par—Preferred   46,000         Paid-in capital in excess of stated value—Common   196,000         Total paid-in capital         2,034,000   Retained earnings         410,000   Total stockholders’ equity       $ 2,444,000       Note: The market value per share of the common stock is $42, and the market value per share of the preferred stock is $28.   Required What is the par value per share of the preferred stock? What is the dividend per share on the preferred stock? What is the number of common stock shares outstanding?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The stockholders’ equity section of the balance sheet for Mann Equipment Co. at December 31, Year 1, is as follows:

 
Stockholders’ Equity            
Paid-in capital            
Preferred stock, ? par value, 5% cumulative,
260,000 shares authorized, 56,000 shares issued and outstanding
$ 672,000        
Common stock, $20 stated value, 310,000 shares
authorized, 56,000 shares issued and outstanding
  1,120,000        
Paid-in capital in excess of par—Preferred   46,000        
Paid-in capital in excess of stated value—Common   196,000        
Total paid-in capital         2,034,000  
Retained earnings         410,000  
Total stockholders’ equity       $ 2,444,000  
 

 

Note: The market value per share of the common stock is $42, and the market value per share of the preferred stock is $28.

 

Required

  1. What is the par value per share of the preferred stock?

  1. What is the dividend per share on the preferred stock?

  1. What is the number of common stock shares outstanding?

  1. What was the average issue price per share (price for which the stock was issued) of the common stock?

  1. If Mann Equipment Company declared a 2-for-1 stock split on the common stock, how many shares will be outstanding after the split? What amount will be transferred from the retained earnings account because of the stock split? Theoretically, what will be the market price of the common stock immediately after the stock split?

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