Award 034 out of 100 point The stockholders equity section

. Award: 034 out of 100 point The stockholders\' equity section on the December 31 balance sheet of Chemfast Corporation reported the following amounts Contributed Capieal Preferred Stock (par $20, authorized 10,000 shares, ? issued of which 1,000 shares are held as treasury stock Additional Paid-n Capital, Prefemed Common Stock (no-par, authorized 20.000 shares, issued and 100.000 13.250 outstanding 5.800 shares) Retained E Treasury Stock 1,000 Preferred shares at cost 568.400 28,000 0,400 Assume that no shares of breasury stock have been sold in the pas Required Comelete the folowing statemernts. (Decreases should be indicated by a minus sign. Round per share to 2 decimal places 1 The number of shares of preferned stock issued was 5000 2 The number of shares of pneferred stock outstanding ws 3. The average issue price of he pefermed sock was 4 The average issue prce of the common stock w The Feasury stock trarsaction increased (deoreased stocknoce 6 The easury stock cost Hints Book&Resources; References Leaming Objective 11-02 Explain and analyce common stock tra Worksheet Difficulity: 2 Medium Leaming Objective 11-04 Describe the characeristics of prefeme nalyze transactions aflecting pered s O Type here to search

Solution

Answer 2.

Number of shares of preferred stock outstanding = Number of shares of preferred stock issued - Number of shares of preferred stock held as treasury stock
Number of shares of preferred stock outstanding = 5,000 - 1,000
Number of shares of preferred stock outstanding = 4,000

Answer 3.

Average issue price of the preferred stock = (Preferred stock + Additional paid-in capital, preferred) / Number of shares of preferred stock issued
Average issue price of the preferred stock = ($100,000 + $13,250) / 5,000
Average issue price of the preferred stock = $22.65 per share

Answer 4.

Average issue price of the common stock = (Common stock + Additional paid-in capital, common) / Number of shares of common stock issued
Average issue price of the common stock = ($568,400 + $0) / 5,800
Average issue price of the common stock = $98.00 per share

Answer 5.

The treasury stock transaction will decrease stockholders’ equity by $9,400

Answer 6.

Treasury stock cost = Treasury stock, preferred / Number of shares of preferred stock held as treasury
Treasury stock cost = $9,400 / 1,000
Treasury stock cost = $9.40

Answer 7.

Total stockholders’ equity = Preferred stock + Additional paid-in capital, preferred + Common stock + Retained earnings - Treasury stock
Total stockholders’ equity = $100,000 + $13,250 + $568,400 + $28,000 - $9,400
Total stockholders’ equity = $700,250