Working with common stock, par value and contributed capital
Larry Corporation's charter allows it to sell 400,000 shares of $1 par value common stock. To date the firm has sold 150,000 shares for a total of $1,050,000. Larry has reacquired 3,000 shares from shareholders at a price of $10 per share. Retained earnings equals $350,000. What total amount of contributed capital should Larry report? What amount should be reported for the common stock account? What was the average selling price of each share of common stock? How many shares of stock are outstanding? What amount should be reported for stockholder's equity?
Solution Preview
Stage 1: Larry's has 400,000 shares X $1/share = $400,000 available for sale.
<br>
<br>Stage 2: Larry's has sold 150,000 shares X $7/share = $1,050,000. (This is the $ amount received.) Thus they only have 250,000 shares remaining to be sold.
<br>
<br>Stage 3: Larry has reacquired ...
Solution Summary
Stage 1: Larry's has 400,000 shares X $1/share = $400,000 available for sale.
Stage 2: Larry's has sold 150,000 shares X $7/share = $1,050,000. (This is the $ amount received.) Thus they only have 250,000 shares remaining to be sold.
Stage 3: Larry has reacquired 3,000 shares X $10/share = $30,000. Thus they now have 253,000 shares in their possession and have net cash proceeds of $1,020,000.
Requirement 1-This is a new company so the shares issued in a, b, c, d transactions should equal the # o/s shares at end of year. Requirement 3-Total ContributedCapital or Paid In Capital is the total Stock plus Paid in Capital in Excess accounts. Again, since this is a new company there are no beginning balances.
Kinkaid
An electronics corporation's common stock is selling for $44 per share, and its common stockholders' equity is shown here.
a. Show the impact of a 50% stock dividend.
b. Show the impact of a 3-for-2 stock split.
c. Describe how the stock market would react to each event. How would you explain the difference in reaction?
P
1. Heintz Corp. has just declared a 10% stock dividend. The company's pre-stock dividend common stockholders' equity was as follows:
Common stock ($0.50 par, 10,000,000 shares) $5,000,000
Contributedcapital in excess of par 48,000,000
Retained earnings 97,500,000
Total common stockholders'
Changes in Stockholders Equity
The stockholders' equity section Winslow Design Company's 12-31, 2009 balance
sheet as appeared as follows:
Contributedcapital
Preferred stock-$100 par (10,000 shares authorized, 1250 shares issued) 125,000
Additional paid in capital on p
When common stock has a parvalue:
a. the liability of the stockholders is limited to the parvalue.
b. there will probably be additional paid-in capital in the balance sheet.
c. the market value of the stock will be higher than if there is no parvalue.
d. the paid-in capital will equal the parvalue of the number o
Presented below is information related to Edis Corporation:
CommonStock, $1 par $4,300,000
Paid-in Capital in Excess of Par?Common Stock 550,000
Preferred 8 1/2% Stock, $50 par 2,000,000
Paid-in Capital in Excess of Par?Preferred Stock 400,000
Retained Earnings
On Oct 31 the stockholder's equity section of Gregg Company's balance sheet
consists of common stock $1,074,000 and retained earnings $405,700.
Gregg is considering the following two courses action:
(1) declaring a 5% stock dividend on the 89,500 $12 parvalue shares outstanding of
(2) effecting a 2-for-1 stock split th
A:
Prepare journal entries to record the following four separate issuances of stock:
1. Two thousand shares of no-parcommon stock are issued to the corporation's promoters in exchange for their efforts, estimated to be worth $30,000. The stock has no stated value.
2. Two thousand shares of no-parcommon stock are issue
