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 $ –0–Common stock, $5 par value 20,000Additional paid-in capital 100,000Total paid-in capital 120,000Retained earnings 53,000Treasury stock (3,700)Total stockholders’ equity $ 169,300Required:Based on the stockholders’ equity section of The Seventies Shop, answer the following questions. Remember that all amounts are presented in thousands.1. How many shares of preferred stock have been issued?2. How many shares of common stock have been issued?3. Total paid-in capital is $120 million. At what average price per share were the common shares issued?4. If retained earnings at the beginning of the period was $45 million and net income during the year was $9,907,500, how much was paid in dividends for the year?5. If the treasury stock was purchased for $20 per share, how many shares were purchased?6. How much was the dividend per share? (Hint: Dividends are not paid on treasury stock.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 $ –0–
Common stock, $5 par value 20,000
Additional paid-in capital 100,000
Total paid-in capital 120,000
Retained earnings 53,000
Treasury stock (3,700)
Total stockholders’ equity $ 169,300

Required:
Based on the stockholders’ equity section of The Seventies Shop, answer the following questions. Remember that all amounts are presented in thousands.
1. How many shares of preferred stock have been issued?
2. How many shares of common stock have been issued?
3. Total paid-in capital is $120 million. At what average price per share were the common shares issued?
4. If retained earnings at the beginning of the period was $45 million and net income during the year was $9,907,500, how much was paid in dividends for the year?
5. If the treasury stock was purchased for $20 per share, how many shares were purchased?
6. How much was the dividend per share? (Hint: Dividends are not paid on treasury stock.)

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