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Accounting 211 Tuesday, February 23rd, 1999 Announcements: none Lecture notes: Components of Stockholder's Equity--common stock --preferred stock
Issued Shares --the number of shares sold / issued to dateOutstanding Shares --the number of shares issues minus the number of shares held in treasuryPar Value --the minimum number of capital retained, has nothing to do with value of stock
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Cash |
70,000 |
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Common Stock |
50,000 |
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Paid-In Capital In Excess of Par Value |
20,000 |
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8/15/98
5,000 shares of stock are issued in exchange for a building. The fair market value of the stock is $8 a share.
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Building |
40,000 |
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Common Stock |
25,000 |
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PICEPV |
15,000 |
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Balance Sheet Presentation
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Common Stock |
75,000 |
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PICEPV |
35,000 |
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Contributed Capital |
$110,000 |
8/30/98
500 shares of stock are purchased by the issuing company at $6 a share (treasury stock).
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Treasury Stock |
3,000 |
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Cash |
3,000 |
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9/4/98
200 shares of treasury stock are sold for $7 a share.
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Cash |
1,400 |
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Treasury Stock |
1,200 |
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Paid-In Capital, Treasury Stock |
200 |
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Balance Sheet Presentation
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Common Stock |
75,000 |
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PICEPV (common stock) |
35,000 |
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PIC (treasury stock) |
200 |
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Treasury Stock |
- 1,800 |
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$108,400 |
The remaining 300 shares of treasury stock are sold for $5 a share.
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Cash |
1,500 |
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PIC (TS) |
200 |
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Retained Earnings |
100 |
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Treasury Stock |
1,800 |
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Common Stock |
700,000 |
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PICEPV (CS) |
490,000 |
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Retained Earnings |
270,000 |
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Treasury Stock |
- 79,000 |
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$1,381,000 |
Par Value = $10
What is the average sales price per share of common stock?
(700,000 + 490,000) / 70,000 = $17
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a) |
Treasury Stock |
200,000 |
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Cash |
200,000 |
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b) |
Treasury Stock |
44,800 |
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Cash |
44,800 |
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c) |
Cash |
131,000 |
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Treasury Stock |
110,000 |
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PIC (TS) |
21,000 |
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d) |
Cash |
72,000 |
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PIC (TS) |
18,000 |
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Treasury Stock |
90,000 |
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e) |
Cash |
9,600 |
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PIC (TS) |
3,000 |
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Retained Earnings |
4,200 |
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Treasury Stock |
16,800 |
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f) |
Common Stock |
10,000 |
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PICEPV (CS) |
5,000 |
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Retained Earnings |
13,000 |
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Treasury Stock |
28,000 |
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Par Value of Preferred Stock = $500,000 |
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Annual Dividend = 500,000 x 8% = $40,000 / year |
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X1 Dividends Paid = $30,000 |
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Preferred Stock = $30,000 |
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Common Stock = $0 |
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Preferred Stock Dividends in Arrears = $10,000 |
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X2 Dividends Paid = $30,000 |
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Preferred Stock = $30,000 |
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Common Stock = $0 |
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Preferred Stock Dividends in Arrears = $20,000 |
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X3 Dividends Paid = $94,000 |
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Preferred Stock = $60,000 |
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Common Stock = $34,000 |
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X4 Dividends Paid = $130,000 |
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Preferred Stock = $40,000 |
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Common Stock = $90,000 |
