Question
ABC has a corporate charter that authorizes it to issue up to 100,000 shares of $1 par value common stock. The following events occur in
ABC has a corporate charter that authorizes it to issue up to 100,000 shares of $1 par value common stock. The following events occur in 2022:
On January 1, ABC issues 10,000 shares of common stock for $20 per share. On April 1, ABC declares a dividend of $2 per share. On May 1, the dividend is paid. On September 1, ABC repurchases 1,000 shares of its common stock for $15 per share. On October 1, ABC declares another $2 per share dividend. On November 1, the dividend is paid. ABC had $50,000 in net income for the year.
Use above information to answer following questions.
1) As of December 31, 2022, what are the total number of shares issued by ABC?
2) As of December 31, 2022, what are the total number of shares outstanding for ABC?
3) What is the balance of Dividends Payable as of December 31, 2022?
4) As of December 31, 2022, what is the balance of Retained Earnings?
5) What is the total balance in Equity as of December 31, 2022?
6) What is the balance in Treasury Stock as of December 31, 2022?
7) What is the balance in Common Stock, Par Value as of December 31, 2022?
8) What is the balance in Additional Paid in Capital (i.e. Capital in Excess of Par) as of December 31, 2022?
9) By how much does the declaration and payment of dividends during 2022 decrease net income for ABC?
10) As a result of these events only, what is the balance in cash as of December 31, 2022?
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