Question

he stockholders' equity section on the December 31, 2009, balance sheet of Chemfast Corporation reported the following amounts:

Contributed Capital
Preferred Stock (par $21; authorized 8,500 shares, ? issued, of which 600 shares are held as treasury stock) $ 165,900
Additional Paid-in Capital, Preferred 15,400
Common Stock (no-par; authorized 20,000 shares, issued and outstanding 10,000 shares)

590,000
Retained Earnings 26,000
Preferred Treasury Stock, 600 shares at cost 6,300
Assume that no shares of treasury stock have been sold in the past.


Required:
Complete the following statements. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

1. The number of shares of preferred stock issued was .
2. The number of shares of preferred stock outstanding was .
3. The average issue price of the preferred stock was $ per share.
4. The average issue price of the common stock was $ .
5. The treasury stock transaction decrease stockholders' equity by $ .
6. The treasury stock cost $ per share.
7. Total stockholders' equity is $ .

Answer 1

Answer:

1.7900 shares

2.7300 shares

3.$22.95

4.$59

5.$6,300

6.$10.50

7.$791,000

Explanation:

The number of preferred shares=total par value of preferred shares issued/par value=$165,900/$21=7900 shares

The number of preferred shares outstanding is issued shares minus treasury stock=7900 shares-600 shares=7,300 shares

average issue price of preferred stock=(total par value+additional paid capital)/issued shares=($165,900+$15,400)/7900=$22.95

Average issue price of common stock==common stock amount/issued shares=$590,000/10000=$59

The treasury stock decreases stockholders' equity by the amount paid to repurchase the shares which is $6,300

Treasury stock cost $ per share=cost of treasury cost/number of treasury stock=$6300/600=$10.50

Total stockholders' equity in $=preferred stock+preferred stock additional paid in capital+common stock+retained earnings -treasury stock

Total stockholders' equity in $=165,900+15,400+590,000+26000-6300=$791,000