Analyzing and Computing Average Issue Price and Treasury Stock Cost Following is the stockholders' equity section from the Campbell Soup Company balance sheet. (Note: Campbell's uses shareowners' equity in lieu of the more common title of stockholders' equity'). Shareholders' Equity (millions, except per share amounts) July 3 Preferred stock: authorized 40 shares; non issued Capital stock, $0375 parvalue; authorized 560 shares; ' ' issued 323 shares ' Additional paid-in capital ' 354' 339 ' ' Earnings retained in the business 1,927' 1,754 Capital stock in treasury, at cost (664) ' (556) Accumulated other comprehensive loss (104) (168) Total Campbell Soup Company shareowners' equity 1,525 1,381 Noncontrolling interests 8 (4) Total equity $1,533 $1,377 Campbell Soup Company also reports the following statement of stockholders' equity. Campbell Soup Company Accumulated Issued In Treasury Earnings Other Additional Retained in Comprehensive Noncontrolling Total (Millions, except per share amounts) Shares Amount Shares Amount Paid-in Capital the Business Income (Loss) Interests Equity Balance at August 2, 2015 323' 312' (13) ' $(556)' 3339' $1,754 $(168)' $(4) $1,377 Contribution from noncontrolling interests ' ' ' ' ' ' - Noncontrolling Interests Other Activity ' ' ' ' ' ' ' 9 ' 9 Net earnings (loss) ' ' ' ' ' ' 553 ' ' 563 Other comprehensive income (loss) ' ' ' ' ' ' 64' 3' 67 Dividends ($1 ,248 per share) ' ' ' ' ' ' (390) ' ' (390) Treasury stock purchased ' ' ' (3) ' (143) ' ' ' ' (143) Treasury stock issued under management incentive and stock option plans' ' ' 1 ' 35' 15' ' ' 50 ' 323' 312' (15) ' $(664)' $354' $1,927 3(104)' ss' $1,533 Balance atJuly 31, 2016 (a) Campbell Soup Company reports $12 million in its Common Stock account. Which of the following statements best describes the manner in which this number is computed? OThe computation uses the number of issued shares multiplied by the par value of the stock. OThe computation uses the number of issued shares multiplied by the market value of the stock. OThe computation uses the number of outstanding shares multiplied by the market price of the stock. OThe computation uses the number of outstanding shares multiplied by the par value of the stock. Mark 1.00 out of 1.00 (b) At what average price were the Campbell Soup shares issued? (Round your answer to two decimal places.) $ X (c) Reconcile the beginning and ending balances of retained earnings. (Enter any deductions as negative numbers) ($ millions) Retained earnings, August 2, 2015 $ 1,754 Net earnings 563 V Dividends (390) Miscellaneous OV Retained earnings, July 31, 2016 $ 1,927 (d) Campbell Soup reports an increase in stockholders' equity relating to the exercise of stock options (titled "Treasury stock issued under management incentive and stock option plans"). This transaction involves the purchase of common stock by employees at a preset price. Which of the following statements best describes the nature of this transaction? OThe exercise of employee stock options resulted in the issuance of 1 million shares of stock for a total of $50 million that was recognized as a gain on sale, thus increasing Retained Earnings. OThe exercise of employee stock options result ance of 1 million shares of stock for a total of $50 million that was recognized as a reduction of Treasury Stock and an increase in Additional Paid-In Capital. Screenshot(e) Which of the following statements best describes the transaction relating to the "Treasury stock purchased" line in the statement of stockholders' equity? OCampbell Soup repurchased 3 million shares of common stock for a total of$143 million. The effect of the repurchase of stock is to recognize a loss on the repurchase, thus reducing Cash ani Retained Earnings. OCampbell Soup repurchased 3 million shares of common stock for a total of$143 million. This transaction had no effect on the components of Stockholders' Equity. OCampbell Soup repurchased 3 million shares of common stock for a total of$143 million. The effect of this transaction is to increase Stockholders' Equity. Campbe|| Soup repurchased 3 million shares of common stock for a total of$143 million. The effect of the repurchase of stock is to reduce Cash and Stockholders' Equity.\\/ Mark 100 out of 1.00 (f) Campbell Soup's stock price was $62.27 on July 29, 2016 (the closest trading day to fiscal year-end). Determine the company's market capitalization that day. Enter answers in millions. Round answer to the nearest million. $ 19365.9 3: million (g) Calculate and interpret the company's market-to-book ratio atJuly 29,2016. Round answer to two decimal places. 12.6 X
