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    Common Stock and Paid-In Capital Accounts

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    1. Prepare the December 31, 2009, stockholders' equity section of the balance sheet assuming that the company reports net income of $72,000 for the year.
    Paid-in capital
    8% Preferred stock, $29 par value,
    50,000 shares authorized, 5,000
    shares issued and outstanding $
    Common stock, $5 par value, 350,000
    shares authorized; 160,000 shares
    issued $
    Additional paid-in capital
    Paid-in capital in excess of par
    value-preferred stock

    Paid-in capital in excess of par
    value-common stock
    Paid-in capital from treasury stock
    Total paid-in capital
    Retained earnings

    Less: Treasury stock (2,500 shares) at cost
    Total Stockholders' Equity$

    2. Identifying and Analyzing Financial Statement Effects of Dividends
    The stockholders' equity of Kinney Company at December 31, 2008, is shown below.
    5% preferred stock, $100 par value, 28,000 shares authorized;
    13,000 shares issued and outstanding $ 1,300,000
    Common stock, $5 par value, 80,000 shares authorized;
    20,000 shares issued and outstanding 100,000
    Paid-in capital in excess of par value?preferred stock 40,000
    Paid-in capital in excess of par value?common stock 120,000
    Retained earnings 656,000
    Total stockholders' equity $2,216,000

    The following transactions, among others, occurred during 2009:
    Apr. 1 Declared and issued a 100% stock dividend on all outstanding shares of common stock. The market value of the stock was $11 per share.
    Dec. 7 Declared and issued a 4% stock dividend on all outstanding shares of common stock. The market value of the stock was $14 per share.
    Dec. 20 Declared and paid (1) the annual cash dividend on the preferred stock and (2) a cash dividend of 80 cents per common share.

    (a) Use the financial statement effects template to indicate the effects of these separate transactions. (You MUST enter the number "0", the number zero, in all cells that should be BLANK.)
    Balance Sheet
    Income Statement

    Transaction Cash Asset + Noncash Assets = Liabilities + Contributed Capital + Earned Capital Revenues − Expenses = Net Income
    Apr. 1 = − =

    Dec. 7 = − =

    Dec. 20 = − =

    (b) Compute retained earnings for 2009 assuming that the company reports 2009 net income of $253,000.
    $

    3. Reconciling Common Stock and Treasury Stock Balances
    Following is the stockholders' equity section from the Abercrombie & Fitch? balance sheet.
    Shareholders' Equity ($ thousands) February 2, 2008 February 3, 2007
    Class A common stock?$0.01 par value: 150,000,000
    shares authorized and 102,300,000 shares issued at
    February 2, 2008, and February 3, 2007, respectively $ 1,023 $ 1,023
    Paid-in capital 319,451 289,732
    Retained earnings 2,051,463 1,646,290
    Accumulated other comprehensive income (loss),
    net of tax 7,118 (994)
    Treasury stock at average cost: 18,941,116 and
    14,999,945 shares at February 2, 2008 and
    February 3, 2007, respectively (760,752) (530,764)
    Total shareholders' equity $1,618,303
    $1,405,287

    a) Show the computation to yield the $1,023 balance reported for common stock.
    ( shares)
    x ($ )
    = $1,023 thousand

    (b) How many shares are outstanding at 2008 fiscal year-end?
    shares

    (c) Use the common stock and paid-in capital accounts to determine the average price at which Abercrombie & Fitch issued its common stock. (Round your answer to two decimal places.)
    $

    (d) Use the treasury stock account to determine the average price Abercrombie & Fitch paid when it repurchased its common shares. (Round your answer to two decimal places.)
    $.

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    https://brainmass.com/business/accounting/common-stock-paid-capital-accounts-433340

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