Can you please calculate the number 2 since for number 1there is not enough info
ID: 2545037 • Letter: C
Question
Can you please calculate the number 2 since for number 1there is not enough information?
c. Common Shares: $1,836,364 and Retained Earnings: $2,963,636. d. Common Shares: $1,760,000 and Retained Earnings: $3,460,000. e. None of the above. Question L-B (8 marks) During 20X8, RD Ltd. repurchased 4,000 common shares and 4,000 preferred shares, respectively. RD Ltd. also issued 1,000 common shares for $210 each. In 20X8, Net income (loss) was ($100,000), and dividends declared were $40,000. The comparative equity accounts for 20X7 and 20X8 are: Balances- December 31 Preferred Shares Common Shares Contributed capital-repurchase of preferred shares Contributed capital-repurchase of common shares Retained earnings 20x8 20X7 s 440,000 600,000 S1,300,000 1,900,000 S 24,000 0 s 30,000 s 250,000 440,000Explanation / Answer
In absence of number of shares & face value of each share as on 31.12.07 & 31.12.08, it can only be assumed that the 4,000 common stocks were repurchased at $210 each which is the market price at which the company had issued 1,000 commom stock in 2008. In order to attract the investors in a repurchase program, its is vital that they are offered atleast the current market price prevaling at the time of repurchase.
Due to limited information available in the question, it can only be made out that the common stock were repurchased at $210 each.