1.
To identify: The numbers of shares of preferred stock have been issued.
1.
Answer to Problem 10.4AP
Number of preferred stock issued by the V World is 6,000,000 shares.
Explanation of Solution
Preferred stock: The stock that provides a fixed amount of return (dividend) to its stockholder before paying dividends to common stockholders is referred as preferred stock.
Compute the number of preferred stock issued by the V World:
Hence, the number of preferred stock issued by the V World is 6,000,000 shares.
2.
To identify: The numbers of shares of common stock have been issued.
2.
Answer to Problem 10.4AP
Number of common stock issued by the V World is 30,000,000 shares.
Explanation of Solution
Common stock: These are the ordinary shares that a corporation issues to the investors in order to raise funds. In return, the investors receive a share of profit from the profits earned by the corporation in the form of dividend.
Compute the number of common stock issued by the V World:
Hence, the number of common stock issued by the V World is 30,000,000 shares.
3.
The average price per share at which the preferred share would have been issued.
3.
Answer to Problem 10.4AP
Average price per share for which the preferred share would have been issued is $50.
Explanation of Solution
Preferred stock: The stock that provides a fixed amount of return (dividend) to its stockholder before paying dividends to common stockholders is referred as preferred stock.
Step 1: Calculate total paid in capital for common stock.
Step 2: Calculate total paid in capital for preferred stock.
Step 3: Calculate the average price per share for which the preferred share would have been issued.
Hence, the average price per share for which the preferred share would have been issued is $50.
4.
The amount of net income for the year.
4.
Answer to Problem 10.4AP
The amount of net income for the year is $68,000.
Explanation of Solution
Net income: Net income is the excess amount of revenue which arises after deducting all the expenses of a company. In simple terms, it is the difference between total revenue and total expenses of the company.
Determine the amount of net income for the year as follows:
Hence, the amount of net income for the year is $68,000.
5.
The average cost per share of the treasury stock acquired.
5.
Answer to Problem 10.4AP
Average cost per share of the treasury stock acquired is $32.
Explanation of Solution
Treasury Stock: It refers to the shares that are reacquired by the corporation that are already issued to the stockholders, but reacquisition does not signify retirement.
Hence, the average cost per share of the treasury stock acquired is $32.
Want to see more full solutions like this?
Chapter 10 Solutions
Financial Accounting
- [The following information applies to the questions displayed below.] The stockholders' equity section of Velcro World is presented here. VELCRO WORLD Balance Sheet (partial) (S and shares in thousands) Stockholders' equity: Preferred stock, $1 par value Common stock, $1 par value Additional paid-in capital Total paid-in capital Retained earnings 5,800 28,000 1,028,600 1,062,400 286,000 (360,000) $ 988,400 Treasury stock, 12,000 common shares Total stockholders equity Based on the stockholders' equity section of Velcro World, answer the following questions. Remember that all amounts are presented in thousands Problem 10-4A Part 4 4. If retained earnings at the beginning of the period was $248 million and $28 million was paid in dividends during the year, what was the net income for the year? (Enter your answer in million (i.., 5,000,000 should be entered as 5).) Net income millionarrow_forwardRequired information [The following information applies to the questions displayed below.] The stockholders' equity section of The Seventies Shop is presented here. THE SEVENTIES SHOP Balance Sheet (partial) ($ in thousands) Stockholders' equity: Preferred stock, $50 par value Common stock, $5 par value Additional paid-in capital Total paid-in capital Retained earnings Treasury stock Total stockholders' equity $0 13,000 28,600 Number of shares 41,600 46,000 (2,300) $85,300 Based on the stockholders' equity section of The Seventies Shop, answer the following questions. Remember that all amounts are presented in thousands. 5. If the treasury stock was purchased at $16 per share, how many shares were purchased? (Enter your answer in total number of shares, not in thousands.)arrow_forward[The following information applies to the questions displayed below.] The stockholders’ equity section of Velcro World is presented here. VELCRO WORLD Balance Sheet (partial) ($ and shares in thousands) Stockholders' equity: Preferred stock, $1 par value $ 6,000 Common stock, $1 par value 30,000 Additional paid-in capital 1,164,000 Total paid-in capital 1,200,000 Retained earnings 288,000 Treasury stock, 11,000 common shares (352,000 ) Total stockholders' equity $ 1,136,000 Based on the stockholders’ equity section of Velcro World, answer the following questions. Remember that all amounts are presented in thousands. Required: 1. How many shares of preferred stock have been issued?arrow_forward
- Required information [The following information applies to the questions displayed below.] The stockholders' equity section of The Seventies Shop is presented here. THE SEVENTIES SHOP Balance Sheet (partial) ($ in thousands) Stockholders' equity: Preferred stock, $50 par value Common stock, $5 par value Additional paid-in capital Total paid-in capital Retained earnings Treasury stock Total stockholders' equity $0 13,000 28,600 Basec the stockholders' equity section of The Seventies Shop, answer the following questions. Remember that all amounts are presented in thousands. Average price 41,600 46,000 (2,300) $85,300 3. Total paid-in capital is $41.60 million. At what average price per share were the common shares issued? per sharearrow_forward[The following information applies to the questions displayed below.] The stockholders' equity section of Velcro World is presented here. VELCRO WORLD Balance Sheet (partial) (Sand shares in thousands) Stockholders' equity: Preferred stock, $1 par value Common stock, $1 par value Additional paid-in capital Total paid-in capital Retained 5,800 28,000 1,028,600 1,062,400 286,000 (360,000) 988,400 rnings Treasury stock, 12,000 common shares Total stockholders' equity Based on the stockholders' equity section of Velcro World, answer the following questions. Remember that all amounts are presented in thousands. Problem 10-4A Part 5 5. What was the average cost per share of the treasury stock acquired? Average cost per sharearrow_forward! Required information [The following information applies to the questions displayed below.] The stockholders' equity section of The Seventies Shop is presented here. THE SEVENTIES SHOP Balance Sheet (partial) ($ in thousands) Stockholders' equity: Preferred stock, $50 par value Common stock, $5 par value Additional paid-in capital Total paid-in capital Retained earnings Treasury stock Total stockholders' equity $0 19,500 93,600 113, 100 52,500 (3,600) $162,000 Based on the stockholders' equity section of The Seventies Shop, answer the following questions. Remember that all amounts are presented in thousands. 2. How many shares of common stock have been issued? (Enter your answer in total number of shares, not in thousands.) Number of sharesarrow_forward
- The stockholders' equity section of Velcro World is presented here. VELCRO WORLD Balance Sheet (partial) ($ and shares in thousands) Stockholders' equity: Preferred stock, $1 par value Common stock, $1 par value Additional paid-in capital Total paid-in capital Retained earnings $ 6,000 30,000 1,164,000 1,200,000 288,000 (352,000) Treasury stock, 11,000 common shares Total stockholders' equity $1,136,000 Based on the stockholders' equity section of Velcro World, answer the following questions. Remember that all amounts are presented in thousands. Problem 10-4A Part 2 2. How many shares of common stock have been issued? (Enter you answer in total number of shares, not in thousands.) Number of shares 2,727arrow_forwardRequired information Problem 10-4A (Static) Analyze the stockholders' equity section (LO10-7) [The following information applies to the questions displayed below.] The stockholders' equity section of Velcro World is presented here. VELCRO WORLD Balance Sheet (partial) ($ and shares in thousands) Stockholders' equity: Preferred stock, $1 par value Common stock, $1 par value Additional paid-in capital Total paid-in capital Retained earnings Treasury stock, 11,000 common shares Total stockholders' equity Problem 10-4A (Static) Part 3 Based on the stockholders' equity section of Velcro World, answer the following questions. Remember that all amounts are presented in thousands. Preferred shares issued price 3. If the common shares were issued at $30 per share, at what average price per share were the preferred shares issued? $ $6,000,000 30,000,000 870,000 1,164,000,000 1,200,000,000 288,000,000 (352,000,000) $1,136,000,000 per sharearrow_forwardOBLEMS Required information [The following information applies to the questions displayed below.] The stockholders' equity section of The Seventies Shop is presented here. THE SEVENTIES SHOP Balance Sheet (partial) ($ in thousands) Stockholders' equity: Preferred stock, $50 par value Common stock, $5 par value Additional paid-in capital Total paid-in capital Retained earnings Treasury stock Total stockholders' equity $0 13,000 28,600 Dividends paid 41,600 46,000 (2,300) $85,300 Saved Based on the stockholders' equity section of The Seventies Shop, answer the following questions. Remember that all amounts are presented in thousands. 4. If retained earnings at the beginning of the period was $39 million and net income during the year was $10,438,750, how much was paid in dividends for the year? (Enter your answer in dollars not in millions. (i.e., 5 should be entered as 5,000,000).)arrow_forward
- The stockholders' equity section of The Seventies Shop is presented here THE SEVENTIES SHOP Balance Sheet (partial) ($ in thousands) Stockholders' equity: Preferred stock, $50 par value Common stock, $5 par value Additional paid-in capital Total paid-in capital Retained earnings Treasury stock Total stockholders' equity $0 17,500 70,000 87,500 Number of shares 50,500 (3,200) $134,800 Based on the stockholders' equity section of The Seventies Shop, answer the following questions. Remember that all amounts are presented in thousands. 5. If the treasury stock was purchased at $16 per share, how many shares were purchased? (Enter your answer in total number of shares, not in thousands.)arrow_forwardThe stockholders’ equity section of The Seventies Shop is presented here.THE SEVENTIES SHOP Balance Sheet (partial)($ in thousands)Stockholders’ equity:Preferred stock, $50 par value $ –0–Common stock, $5 par value 20,000Additional paid-in capital 100,000Total paid-in capital 120,000Retained earnings 53,000Treasury stock (3,700)Total stockholders’ equity $ 169,300Required:Based on the stockholders’ equity section of The Seventies Shop, answer the following questions. Remember that all amounts are presented in thousands.1. How many shares of preferred stock have been issued?2. How many shares of common stock have been issued?3. Total paid-in capital is $120 million. At what average price per share were the common shares issued?4. If retained earnings at the beginning of the period was $45 million and net income during the year was $9,907,500, how…arrow_forwardThe stockholders’ equity section of Velcro World is presented here. VELCRO WORLD Balance Sheet (partial) ($ and shares in thousands) Stockholders' equity: Preferred stock, $1 par value $ 4,100 Common stock, $1 par value 11,000 Additional paid-in capital 233,000 Total paid-in capital 248,100 Retained earnings 269,000 Treasury stock, 11,000 common shares (143,000 ) Total stockholders' equity $ 374,100 Based on the stockholders' equity section of Velcro World, answer the following questions. Remember that all amounts are presented in thousands. 3. If the common shares were issued at $11 per share, at what average price per share were the preferred shares issued?arrow_forward
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning