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ID: 2573118 • Letter: C
Question
Check %Enroll %Add A Class x VEChapter 11, x TerON SmartBook New tab ezto.mheducation.com/hm.tpx Bookmarks ESCI 111 Quiz 10 F The stockholders' equity section on the December 31 balance sheet of Chemfast Corporation reported the following amounts: Contributed Capital Preferred Stock (par $20, authorized 10,000 shares, ? issued, $118,000 18,290 of which 1,000 shares are held as treasury stock) Additional Paid-in Capital, Preferred Common Stock (no-par; authorized 20,000 shares, issued and outstanding 6,700 shares) Retained Eamings Treasury Stock, 1,000 Preferred shares at cost 716,900 37,000 9,850 Assume that no shares of treasury stock have been sold in the past. Required: Complete the following statements. (Decreases should be indicated by a minus sign. Round per share to 2 decimal places.) Answer is complete but not entirely correct. 5,900 118,000 1. The number of shares of preferred stock issued was 2. The number of shares of preferred stock outstanding was 3. The average issue price of the preferred stock was 4. The average issue price of the common stock was 5. 6. The treasury stock cost 7. Total stockholders' equity is S 23.10 per share 107 The treasury stock transaction increased (decreased) stockholders' equity 9.850 8.850.00 share 8,880,340Explanation / Answer
Statements Sr.No. Statements Answer 1 The number of shares preferred stock issued was ($118000/$20) 5900 2 The number of shares preferred stock outstanding was (5900 - 1000) 4900 3 The average issue price of preferred stock was [($118000+$18290)/5900 shares] $23.10 per share 4 The average issue price of common stock was [$716900/6700 shares] $107.00 per share 5 The treasury stock transaction increased (decreased) stockholders equity by -$9,850 6 The Treasury stock cost ($9850/1000 shares) $9.85 per share 7 Total Stockholders Equity [$118000+$18290+$716900+$37000-$9850] $880,340 Dividend amount to be paid = No.of shares of common stock outstanding * Dividend per share Dividend amount to be paid = (270000 shares - 100000 shares)* $1 = $1,70,000