ACCT1021 Chapter Notes - Chapter 11: Treasury Stock, Common Stock, Preferred Stock

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28 Nov 2016

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Board of directors is accountable to the stockholders. Authorized number of shares: the maximum number of shares of stock a corporation can issue as specified in its charter. Issued shares: the total number of shares of stock that have been sold. Treasury stock: a corporation"s own stock that has been repurchased: shares held as treasury stock are considered issued shares but no outstanding shares. Outstanding shares: the total number of shared of stock that are owned by stockholders on any particular date. Common stock: the basic voting stock issued by a corporation. Do no actively participate in managing the business elect a board of directors and it is the board"s role to hire and monitor executives who manage a company"s activities on a day to day basis. Par value: the nominal value per share of stock as specified in the corporate charter: another name for bond principal or the maturity amount of a bond.

Related Questions

1. 11-4 Reporting the Stockholders' Equity Section of the BalanceSheet [LO2, LO3, LO4]

Shelby Corporation was organized in January 2010 by 10 stockholdersto operate an air conditioning sales and service business. Thecharter issued by the state authorized the following capitalstock:

Common stock, $1 par value, 200,000 shares.

Preferred stock, $8 par value, 6 percent, 50,000 shares.

During January and February 2010, the following stock transactionswere completed:

a.	Collected $40,000 cash from each of the 10 organizers and issued2,000 shares of common stock to each of them.
b.	Issued 15,000 shares of preferred stock at $25 per share; collectedin cash.

Net income for 2010 was $40,000; cash dividends declared and paidat year-end were $10,000.

Required:

Prepare the stockholders' equity section of the balance sheet atDecember 31, 2010. (Omit the "$" sign in your response.)

Stockholders' Equity%u2014December 31, 2010
Contributed capital:
Preferred stock	$
Additional paid-incapital, preferred stock
Common stock
Additional paid-incapital, common stock

Totalcontributed capital
Retained earnings

Total stockholders'equity	$

E11-1Computing Shares Outstanding [LO1]

The 2008 annual report for Fortune Brands, the seller of Pinnaclegolf balls and MasterLock padlocks,disclosed that 750 millionshares of common stock have been authorized. At the end of 2007,235 million shares had been issued and the number of shares intreasury stock was 81 million. During 2008, 1 million common shareswere reissued from treasury, and 5 million common shares werepurchased for treasury stock.

Required:

(a)	Determine the number of common shares issued at the end of 2008.(Enter your answer in millions.)

Issued stock

(b)	Determine the number of common shares in treasury at the end of2008. (Enter your answer in millions.)

Treasury stock

(c)	Determine the number of common shares outstanding at the end of2008. (Enter your answer in millions.)

Shares outstanding

erinfly733

The stockholders' equity section on the December 31 balancesheet of Chemfast Corporation reported the following amounts:


ContributedCapital
Preferred Stock (par $20; authorized 10,000shares, ? issued, of which1,000 shares are held as treasury stock)	$	102,000
Additional Paid-in Capital, Preferred		13,770
CommonStock (no-par; authorized 20,000 shares, issued and outstanding5,900 shares)		584,100
RetainedEarnings		29,000
Treasury Stock,1,000 Preferred shares at cost		9,450

Assume that no shares of treasury stock have been sold in thepast.

Required:

Complete the following statements. (Decreases should beindicated by a minus sign. Round per share to 2 decimalplaces.)


1.	Thenumber of shares of preferred stock issued was
2.	Thenumber of shares of preferred stock outstanding was
3.	Theaverage issue price of the preferred stock was	pershare
4.	Theaverage issue price of the common stock was
5.	Thetreasury stock transaction increased (decreased) stockholdersâequity by
6.	Thetreasury stock cost	pershare
7.	Totalstockholdersâ equity is

Preferred stockâ $25 par value, 10,000 shares authorized, 5,200shares issued and outstanding	$	130,000
Common stockâ$10 par value, 100,000 shares authorized, 80,000shares issued and outstanding		800,000
Total paid-in capital	$	930,000
Retained earnings		550,000
Total stockholdersâ equity	$	1,480,000

ACCT1021 Chapter Notes - Chapter 11: Treasury Stock, Common Stock, Preferred Stock

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