The market price of a share of common stock at the time of issuance was $19.50, while the market price of a preferred share of stock at the time of issuance was $32. The company paid $12.50 per share for its treasury stock.Required:Determine the missing amount in the stockholders' equity section of the balance sheet set forth below.STOCKHOLDERS' EQUITY Contributed Capital:?Preferred Stock, $2.00 par value, authorized 1,000,000 shares;?issued 300,000 shares$ ________ (a)?Additional Paid-in Capital________ (b)?Common Stock, $3.00 par value, authorized 40,000,000 shares; ________ (c)?issued 25,600,000 shares?Additional Paid-in Capital________ (d)?Total Contributed Capital________ (e)Retained Earnings305,683,000 Treasury Stock (10,000 shares, at cost)________ (f)Total
Stockholders' Equity$ ________(g)
What will be an ideal response?
STOCKHOLDERS' EQUITY
Contributed Capital:
| ? | Preferred Stock, $2.00 par value, authorized 1,000,000 shares; |
| ? | issued 300,000 shares | $ 600,000 (a) |
| ? | Additional Paid-in Capital | 9,000,000 (b) |
| ? | Common Stock, $3.00 par value, authorized 40,000,000 shares; | 76,800,000 (c) |
| ? | issued 25,600,000 shares |
| ? | Additional Paid-in Capital | 422,400,000 (d) |
| ? | Total Contributed Capital | 508,800,000 (e) |
| Retained Earnings | 305,683,000 |
| Treasury Stock (10,000 shares, at cost) | (125,000) (f) |
| Total Stockholders' Equity | $ 814,358,000 (g) |
Supporting calculations:
(a) $2.00 Par value per share × 300,000 Shares = $600,000
(b) ($32 Issue price per share - $2.00 Par value per share) × 300,000 Outstanding shares = $9,000,000
(c) $3 Par value per share × 25,600,000 Shares = $76,800,000
(d) ($19.50 Issue price per share - $3.00 Par value per share) × 25,600,000 Outstanding shares = $422,400,000
(e) $600,000 + $9,000,000 + $76,800,000 + $422,400,000 = $508,800,000
(f) Cost of $12.50 × 10,000 Shares = $125,000
(g) $508,800,000 + $305,683,000 - $125,000 = $814,358,000
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