Activity 78 Stockholders Equity Purpose:

Reinforce understanding of amounts reported on the financial statements for stockholders equity. The COCA-COLA COMPANY Shareowners Equity December 31, 2011 $ in millions * Assume capital surplus is all from issuing common stock above par value.

Common stock, $.25 par value

Authorized: 5,600 shares

Issued: 3,520 shares $ 880

Capital surplus* 11,212

Reinvested earnings 53,550

Accumulated other comprehensive income (loss) (2,703)

Treasury shares, at cost (1,257 shares) (31,302)

Refer to the financial information above to answer the following questions.

Q1 The total amount of financing received from shareholders since incorporation is $ million and is generally referred to as . Common stock of the Coca-Cola Company was originally issued (above / at / below / cant tell) par at an average price of $ per share.

Q2 When additional shares of common stock are issued, this event will: (increase / decrease / have no effect on) total assets, (increase / decrease / have no effect on) net income, (increase / decrease / have no effect on) stockholders equity, and (increase / decrease / have no effect on) earnings per share.

Q3 The amount of net income retained in the business and not yet distributed as dividends to the shareholders is $ million, which is generally referred to as .

Q4 Retained earnings (is / is not) a reservoir of cash available for dividends.

Q5 Treasury stock is considered (issued / outstanding / retired) but no longer (issued / outstanding retired). The average price paid for treasury stock is approximately $ per share.

Q6 When a company buys back its own stock, this event will: (increase / decrease / have no effect on) total assets, (increase / decrease / have no effect on) net income, (increase / decrease / have no effect on) stockholders equity, and (increase / decrease / have no effect on) earnings per share.

Q7 The number of common shares currently outstanding is # million shares, which represents 100% ownership of the company.

Q8 Total stockholders equity is $ million, which is the amount of business assets owned by shareholders. Q9 List several factors that would attract you to purchase shares of stock in a particular corporation.