Unformatted text preview: dends Paid During 2012 Common Stock Outstanding =
= $1.354 per share * ($16,000 ÷ $5) – [(8,000 + 4,000) ÷ $20]
In this problem it is assumed that during the year 2012, treasurystock was acquired at $20 a share. E12–11
a. Issue Price per Share =
= *Number of Shares
Issued ÷ Total Par Value of
Common Stock = $8,000
b. $5 a share ÷ $8,000 = Purchase Price of Treasury Stock Par Value
per Share of C/S
= c. $12/Share Since $3,000 worth of treasury stock was used to satisfy the stock options, at a price of $12 a share, a
total of 250 shares were issued through stock options.
Since retained earnings is debited at $2,750, it means that stock options were sold at par value or $1 a
share resulting in the following entry.
Retained Earnings (–SE) 250
Treasury Stock (+SE)
3,000 E12–11 Concluded
d. Per Share Cash Dividend Rate =
= $.519 per share * 6,750 = 8,000 Shares – 1,500 Treasury Shares Purchased + 250 Treasury Reissued E12–12
a. Only those shares that are both issued and outstanding are e...
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