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ANSWER QUESTIONS PART A AND PART B Part A: During 2021, the Nicklaus Corporation participated in three treasury stock transactions: a. On June 30, 2021, the corporation reacquires 130,000 shares for the treasury at a price of $12 per share. b. On July 31, 2021, 15,000 treasury shares are reissued at $15 per share. On September 30, 2021, 15,000 treasury shares are reissued at $10 per share. c. Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2021. (Assume net income for the second and third quarter was $2,650,000.) NICKLAUS CORPORATION Balance Sheet - Shareholders' Equity Section September 30, 2021 Shareholders' equity Preferred stock $ 5,000,000 Common stock 2,000,000 Paid-in capital - excess of par 33,000,000 Paid-in capital - share repurchase 15,000 Retained earnings 2,650,000 $ 42,665,000 Less: Treasury stock (1,700,000) X Total shareholders' equity $ 40,965,000 Part B:_On October 1, 2021, Nicklaus Corporation receives permission to replace its $1 par value common stock (4,000,000 shares authorized, 2,000,000 shares issued, and 1,900,000 shares outstanding) with a new common stock issue having a $0.50 par value. Since the new par value is one- half the amount of the old, this represents a 2-for-1 stock split. That is, the shareholders will receive two shares of the $0.50 par stock in exchange for each share of the $1 par stock they own. The $1 par stock will be collected and destroyed by the issuing corporation. On November 1, 2021, the Nicklaus Corporation declares a $0.07 per share cash dividend on common stock and a $0.23 per share cash dividend on preferred stock. Payment is scheduled for December 1, 2021, to shareholders of record on November 15, 2021. On December 2, 2021, the Nicklaus Corporation declares a 1% stock dividend payable on December 28, 2021, to shareholders of record on December 14. At the date of declaration, the common stock was selling in the open market at $10 per share. The dividend will result in 38,000 (0.01 x 3,800,000) additional shares being issued to shareholders. Prepare the December 31, 2021, shareholders' equity section of the balance sheet for the Nicklaus Corporation. (Assume net income for the fourth quarter was $2,150,000.) NICKLAUS CORPORATION Balance Sheet - Shareholders' Equity Section December 31, 2021 Shareholders' equity Preferred stock $ 5,000,000 Common stock 2,000,000 $ Paid-in capital - excess of par 33,000,000 Paid-in capital - share repurchase 15,000 Retained earnings 2,651,000 X $ 42,666,000 Less: Treasury stock (1,700,000) Total shareholders' equity 40,966,000 Prepare a statement of shareholders' equity for Nicklaus Corporation for 2021. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands.) NICKLAUS CORPORATION Statement of Shareholders' Equity For the Year Ended Dec. 31, 2021 ($ in thousands) Additional Common Retained Stock Capital Earnings Total Paid-in Preferred Stock Treasury Stock Shareholders Equity 0 % 0 0 0 0 X 4,000 25,000 X 0 0 35,000 X 0 2,000 40,000 0 0 X 45,000 Jan. 2, 2021 Issuance of preferred stock Issuance of common stock Purchase of treasury stock Sale of treasury stock Net income Common cash dividends Preferred cash dividends Stock dividend December 31, 2021 0 0 0 0 0 % 0 48 % 6,800 (750) 0 % 00 0 1,578 X 6,800 0 0 0 (750) 0 0 0 (302) 0 (302) X 0 % 0 0 4.000 0 % 65,000 (850) 4,946 0 87,326 2.000 0
