Question

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F Enterprises
Balance Sheet (partial)
At December 31, Year 4
Stockholders' Equity:
Preferred stock ($75 par)	$150,000
Common stock ($0.05 par)	7,500
Additional Paid in capital	2,246,500
Total paid in capital	2,404,000
Retained earnings	375,000
Treasury stock (4,000 common shares)	(72,000)
Total stockholders' equity	$2,707,000

1. How many shares of preferred stock have been issued?      ______

2a. How many shares of common stock have been issued?     ______

2b. How many of the common shares are outstanding?          ______

3. If the common shares were issued at $15 per share, at what average price per share were the preferred shares issued?             $_____

4. If retained earnings at the beginning of the period was $300,000 and $125,000 was earned in net income, what was the amount of dividends declared during the year?$______

5. What was the average cost per share of the treasury stock acquired? $_______

Answer 1

1) Preferred stock issued = 150000/75 = 2000 Shares

2a) Common Stock issued = 7500/.05 = 150000 Shares

2b) Outstanding shares = 150000-4000 = 146000 shares

3) Average issue price = (2404000-150000*15)/2000 = 77 per share

4) Dividend = 300000+125000-375000 = $50000

5) Cost per share = 72000/4000 = 18 per share