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Libby Solutions Ch 11

Libby Solutions Ch 11 - E112 Req 1 The number of authorized...

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E11–2. Req. 1 The number of authorized shares is specified in the corporate charter: 200,000. Req. 2 Issued shares are the shares sold to the public: 160,000 Req. 3 Issued shares 160,000 Treasury stock (20,000) Outstanding shares 140,000 E11–3. Req. 1 Stockholders’ Equity Contributed capital: Preferred stock, authorized 4,000 shares, issued and outstanding, 3,000 shares ....................................................... $ 24,000 Common stock, authorized 103,000 shares, issued and outstanding, 20,000 shares ..................................................... 200,000 Capital in excess of par, preferred ............................................................... 36,000 Capital in excess of stated value, no-par common ...................................... 120,000 Total contributed capital ........................................................................... 380,000 Retained earnings ............................................................................................ 40,000 Total Stockholders’ Equity ........................................................................ $420,000 Req. 2 The answer would depend on the profitability of the company and the stability of its earnings. The preferred stock has a 9% dividend rate. If the company earns more than 9%, the additional earnings would accrue to the current stockholders. If the company earns less than 9%, it would pay a higher rate to the preferred stockholders. E11–4. Req. 1 ($20 x 90,000 shares) - $1,600,000 = $200,000 Req. 2 $900,000 - $1,000,000 + $800,000 = $700,000 Req. 3 90,000 shares – 80,000 shares = 10,000 shares Req. 4 EPS = $1,000,000 ÷ 80,000 = $12.50
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E11–5.
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