The stockholders equity section of the balance sheet of Glob

The stockholders\' equity section of the balance sheet of Global Publishing at December 31, 2017, appears as follows: Stockholders\' equity: 5% preferred stock, $ 100 par, i 4000 50,000 shares authorized,?shares issued. $1,200,000 Common stock, $2 par, 500,000 shares authorized, 140,000 shares issued, ofwhich act held in treasury 280,000 Additional paid-in capital: From issuance of preferred stock From issuance of common stock From treasury stock transactions. From common stock dividends 288,000 840,000 16,000 400,000 $3,024,000 Total paid-in capital Retained earnings ($112,000 equal to cost of treasury stock is not available for dividends). 880,000 $3,904,000 (112,000) $3.792.000 Less: Treasury stock (at cost: 14,000 common shares)... Total stockholders\' equity Answer the following questions based on the stockholders\' equity section given above. The company had no treasury stock purchases before 2017. Refer to the above data. What was the average issue price per share of preferred stock? a $80. 1. b $100 $124. d $148 Refer to the above data. How many shares of common stock are outstanding? a 140,000. b 126,000. ? 500,000. d!20,000. 2. Refer to the above data. A small stock dividend of 5,000 shares was declared and distributed during 2017. What was the market price per share on the date of declaration? a $82 per share, b $80 per share. c $2 per share, d $78 per share 3. Refer to the above data. If Global Publishing had reacquired 16,000 shares of treasury stock early in 2017, then some treasury stock must have been sold during 2017 for: a $5 per share. b $8 per share. c $6 per share. d $16 per share. 4. Refer to the above data. Assume that all remaining treasury stock is reissued at a price of $18 per share in January of 2018. What amount should be credited to the account Additional Paid-in Capital: 5. Treasury Stock Transactions in the journal entry to record this transaction? a $96,000, b $140,000. ? $112,000. d $288,000.

Solution

3.$82 per share.

market price per share on date of declaration = [additional paid in capital from common stock dividend / number of shares issued in stock dividend ] + par value per share.

=>[400,000 / 5,000] + $2

=>$82.

4.$16 per share.

sale price of treasury stock = [cost of treasury stock per share ] + [additional paid in capital from treasury stock transactions / treasury stock sold]

here, treasury stock sold = 16,000 - 14,000 remaining =>2,000

cost of treasury stock per share = 112,000 / 14,000 shares =>$8.

=> sale price of treasury stock = $8 + [$16,000/ 2,000]

=>$8+$8 =>$16.

5.b.$140,000

additiona paid in capita l = [sale price - cost of treasury stock] *number of shares sold

=> [18-8]*14,000

=>$140,000.