On January 1, 2006, Fast Company had the following account balances in its shareholders' equity accounts.
Common stock, $1 par, 250,000 shares issued 250,000
Paid-in capital excess of par, common 500,000
Preferred stock, $100 par, 10,000 shares outstanding 1,000,000
Paid-in capital excess of par, preferred 100,000
Retained earnings 2,000,000
Treasury stock, at cost, 5,000 shares 25,000
During 2006, Fast Company had several transactions relating to common stock.
Declared a property dividend of 100,000 shares of Slow Company, which were previously held by Fast Company as an investment on its books. (book value, $10 per share, market value $9 per share).
February 17: Distributed the property dividend (from Jan 15) to the stockholders.
April 10: A 3-for-1 stock split (not a stock dividend) was declared on outstanding common stock of Fast. The market value of Fast Company's stock was $30 on this date.
July 18: Declared and distributed a 3% stock dividend on outstanding common
stock of Fast when the market value per share was $5.
December 1: Declared a fifty cents per share cash dividend on the outstanding
December 20: Paid the cash dividend.
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Examining Financial Statements
1. Examining Financial Statements Paper
Using the financial statements of Landry's Restaurants located in Appendix A of the text, Fundamentals of Financial Accounting 1st ed., by Phillips, Libby, and Libby, prepare a 1,050-1,400-word paper that addresses the following questions:
a. What is the amount of net income? Which financial statement did you find this information? What are the components of this financial statement?
b. What are the total assets? Which financial statement did you find this information? What are the components of this financial statement?
c. How much did they spend on property and equipment additions? Which financial statement did you find this information? What are the components of this financial statement?
d. Were any stock options exercised? Which financial statement did you find this information? What are the components of this financial statement?
e. Which financial statement do you feel is the most important? Why?
Properly cite your references. If you used an electronic source, include the URL. If you used a printed source please attach a copy of the data to your paper.
Landry's has grown significantly in recent years, with its balance sheets in Exhibit 13.2
showing a 35 percent increase in total assets from $690 million in 2001 to $933 million in
2002 [35% _ ($933 _ 690) _ $690 _ 100%]. In 2003, total assets increased again, from
$933 million in 2002 to $1.1 billion in 2003. Most of this growth appears in the Property
and Equipment category. The financial highlights section of Landry's annual report explains
the cause of this growth. The company added 95 new restaurants during 2002 and
2003, bringing the number of restaurants to 286 at December 31, 2003. The liabilities and
stockholders' equity section of the balance sheets in Exhibit 13.2 suggest that the growth