FINANCIAL ACCOUNTING (LL W/CONNECT) >IP<
4th Edition
ISBN: 9781260063035
Author: SPICELAND
Publisher: MCG CUSTOM
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Chapter 10, Problem 10.4AP
1.
To determine
To identify: The numbers of shares of preferred stock have been issued.
1.
Expert Solution
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 determine
To identify: The numbers of shares of common stock have been issued.
2.
Expert Solution
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.
To determine
The average price per share at which the preferred share would have been issued.
3.
Expert Solution
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.
To determine
The amount of net income for the year.
4.
Expert Solution
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.
To determine
The average cost per share of the treasury stock acquired.
5.
Expert Solution
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.
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Students have asked these similar questions
At December 31, the stockholders’ equity section shows: Ordinary sharecapital, P5 par value; 1,320,000 shares issued and 1,200,000 sharesoutstanding: P6,600,000; Share Premium: P1,400,000; Retained earnings:P500,000; Treasury shares, (120,000 shares): P700,000; Totalshareholders’ equity - P7,800,000. How much is the book value per share?
A. P5.91B. P6.44C. P6.50D. P7.08E. answer not given
At December 31, the stockholders’ equity section shows: Ordinary share capital, P5 par value; 1,320,000 shares issued and 1,200,000 shares outstanding: P6,600,000; Share Premium: P1,400,000; Retained earnings: P500,000; Treasury shares, (120,000 shares): P700,000; Total shareholders’ equity - P7,800,000. How much is the book value per share? *
P5.91
P6.44
P6.50
P7.08
answer not given
The following represents the stockholder’s equity account of Security Data Company:
0
R
Preferred stock
R200,000
Common stock (R4 par)
R200,000
Paid-in capital in excess of par
R350,000
Retained earnings
R350,000
Total stockholder’s equity
########
Additional information provided:
Current share price
R40
Earning Available to Common Shareholders (EACS)
R120,000
The firm is considering a 5% stock dividend.
A. Rework the stockholder’s equity account for Security Data Company should the firm decide to implement the stock dividend.
Current
New
Preferred stock
R200,000
[0,5]
Common stock (R4 par)
R200,000
[1]
Paid-in capital in excess of par
R350,000
0
[1]
Retained earnings
R350,000
[1]
Total stockholder’s equity
########
0.5
Chapter 10 Solutions
FINANCIAL ACCOUNTING (LL W/CONNECT) >IP<
Ch. 10 - Corporations typically do not first raise capital...Ch. 10 - What is the difference between a public and a...Ch. 10 - Prob. 3RQCh. 10 - Which form of business organization is most...Ch. 10 - Prob. 5RQCh. 10 - Prob. 6RQCh. 10 - 7.Explain the difference between authorized,...Ch. 10 - Prob. 8RQCh. 10 - Prob. 9RQCh. 10 - What are the three potential features of preferred...
Ch. 10 - Prob. 11RQCh. 10 - Prob. 12RQCh. 10 - How is the accounting for a repurchase of a...Ch. 10 - Prob. 14RQCh. 10 - Prob. 15RQCh. 10 - Prob. 16RQCh. 10 - Prob. 17RQCh. 10 - 18.What happens to the par value, the shares...Ch. 10 - Prob. 19RQCh. 10 - Prob. 20RQCh. 10 - Prob. 21RQCh. 10 - Prob. 22RQCh. 10 - Prob. 23RQCh. 10 - Prob. 10.1BECh. 10 - Prob. 10.2BECh. 10 - Record issuance of common stock (LO102) Western...Ch. 10 - Prob. 10.4BECh. 10 - Prob. 10.5BECh. 10 - Recognize preferred stock features (LO103) Match...Ch. 10 - Determine the amount of preferred Stock dividends...Ch. 10 - Prob. 10.8BECh. 10 - Prob. 10.9BECh. 10 - Record cash dividends (LO105) Divine Apparel has...Ch. 10 - Prob. 10.11BECh. 10 - Prob. 10.12BECh. 10 - Indicate effects on total stockholders equity...Ch. 10 - Prepare the stockholders equity section (LO107)...Ch. 10 - Prob. 10.15BECh. 10 - Prob. 10.1ECh. 10 - Prob. 10.2ECh. 10 - Prob. 10.3ECh. 10 - Prob. 10.4ECh. 10 - Record common stock, preferred stock, and dividend...Ch. 10 - Prob. 10.6ECh. 10 - Prob. 10.7ECh. 10 - Record cash dividends (LO105) On March 15,...Ch. 10 - Prob. 10.9ECh. 10 - Record stock dividends and stock splits (LO106) On...Ch. 10 - Prob. 10.11ECh. 10 - Prob. 10.12ECh. 10 - Indicate effects on total stockholders equity...Ch. 10 - Prob. 10.14ECh. 10 - Prob. 10.15ECh. 10 - Calculate and analyze ratios (LO108) Financial...Ch. 10 - (LO 102, 104, 105, 108) On January 1, 2018, the...Ch. 10 - Prob. 10.1APCh. 10 - Prob. 10.2APCh. 10 - Indicate effect of stock dividends and stock...Ch. 10 - Prob. 10.4APCh. 10 - Understand stockholders equity and the statement...Ch. 10 - Record equity transactions and prepare the...Ch. 10 - Prob. 10.7APCh. 10 - Match terms with their definitions (LO101 to 108)...Ch. 10 - Record equity transactions and indicate the effect...Ch. 10 - Prob. 10.3BPCh. 10 - Prob. 10.4BPCh. 10 - Prob. 10.5BPCh. 10 - Record equity transactions and prepare the...Ch. 10 - Prob. 10.7BPCh. 10 - Prob. 10.1APCPCh. 10 - Financial Analysis American Eagle Outfitters, Inc....Ch. 10 - Prob. 10.3APFACh. 10 - Comparative Analysis Buckle American Eagle...Ch. 10 - Ethics Put yourself in the shoes of a company...Ch. 10 - Written Communication Preferred stock has...Ch. 10 - Earnings Management Renegade Clothing is...
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