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The Torre Company has the following balances in stockholders equityon December 31st.

Common Stock - $5.00 par,60,000 issued $300,000

Additional paid in capital-common 600,000

Preferred stock - $100par, 5,000issued 500,000

Additional paid in capital-preferred 100,000

Retainedearnings 200,000

Treasury stock (cost -$12.00 pershare) 60,000

Answer the followingquestions:

1. How many shares oftreasury stock are owned?

2. What was the averagemarket price per share at which common stock was issued?

3. What was the averagemarket price per share at which preferred stock wasissued?

4. What is the total valueof the Paid in Capital portion of stockholders equity?

5. What is the total valueof stockholders equity?

6. How many shares ofcommon stock are outstanding?

7. If net income for theyear was $75,000 and a preferred stock dividend of $20,000 waspaid,

what was the beginning valueof retained earnings? How much is earnings per share for

the year?

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Tod Thiel
Tod ThielLv2
29 Sep 2019

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3bThis is the Stockholders Equity section of the balance sheetfor Quanex. Stockholders Equity Convertible 8% preferred stock,$100 par value, 1,000,000 shares Authorized, 5,000 sharesoutstanding, 250 per share call price $300,000 Common Stock, parvalue 50 cents, 25,000,000 shares authorized 200,000 ______ sharesissued Additional Paid in Capital Common Stock 50,000 RetainedEarnings 20,000 Treasury stock purchased 100 shares at $1, parvalue .50 _______ Total Stockholders Equity $ How many shares ofcommon stock have been issued? What is the amount of annualdividends paid to preferred stock holders? What is the total paidin capital? How much is Total stockholder’s equity? How much istreasury stock?

Dividends and Stock Splits

On January 1, 2017, Frederiksen Inc.'s Stockholders' Equitycategory appeared as follows:

Preferred stock, $80 par value, 7%, 3,000 shares
issued and outstanding		 $240,000
Common stock, $10 par value, 15,000 shares
issued and outstanding		 150,000
Additional paid-in capital—Preferred 60,000
Additional paid-in capital—Common 225,000
Total contributed capital $675,000
Retained earnings 2,100,000
Total stockholders’equity $2,775,000

The preferred stock is noncumulative and nonparticipating.During 2017, the following transactions occurred:

On March 1, declared a cash dividend of $16,800 on preferredstock. Paid the dividend on April 1.

On June 1, declared a 5% stock dividend on common stock. Thecurrent market price of the common stock was $18. The stock wasissued on July 1.

On September 1, declared a cash dividend of $0.50 per share onthe common stock; paid the dividend on October 1.

On December 1, issued a 2-for-1 stock split of common stock whenthe stock was selling for $50 per share.

Required:

1. Explain each transaction’s effect on thestockholders’ equity accounts and the total stockholders’equity.


Transaction 		Effect on total
stockholders' equity
On March 1, declared a cash dividend of $16,800 on preferredstock
Paid the dividend on April 1
On June 1, declared a 5% stock dividend on common stock
The stock was issued on July 1
On September 1, declared a cash dividend of $0.50 per share onthe common stock
Paid the dividend on October 1
On December 1, issued a 2-for-1 stock split of common stock,when the stock was selling for $50 per share

Feedback

Incorrect

2. Develop the Stockholders' Equity category ofthe December 31, 2017, balance sheet. Assume that the net incomefor the year was $650,000.

Frederiksen's Inc.
Partial Balance Sheet
December 31, 2017
Stockholders' equity
Preferred stock, $80 par, 7%, 3,000shares issued and outstanding $
Common stock, $5 par, 31,500 sharesissued and outstanding
Additional paid-incapital-preferred stock
Additional paid-in capital-commonstock
Total contributed capital $
Retained earnings
Total stockholders' equity $

Feedback

Partially correct

3. Which of the following statements isincorrect?
The value of the shares issued in the large stock dividendis added to the Retained Earnings account and deducted from theCapital Stock account.

E4-11 Changes in Stockholders’ EquityOn January 1, 2016 the Powder Company listed the followingstockholders’ equity section of its balance sheet:

Contributed Capital

Preferred stock, $100 par $92800

Common stock, $5 par $37400

Additional paid-in capital on preferred stock $21500

Additional paid-in capital on common stock $58700

Total contributed capital $210400

Retained Earnings $185700

Total Stockholders’ Equity $396100

During 2016, the following transactions and events occurred andwere properly recorded:

The company issued 1,800 shares of common stock at $13 pershare.

The company issued 340 shares of preferred stock at $130 pershare.

The company earned net income of $38,950.

The company paid a $7 per share dividend on the preferred stockand a $1 per share dividend on the common stock out- standing atthe end of 2016.

Required

Prepare a statement of changes in stockholders’ equity of thePowder Company for 2016. (Include retained earnings.)

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