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Analyzing and Interpreting Equity Accounts and Comprehensive Income Following is the shareholders' equity section of the 2010 balance sheet for Procter & Gamble Company and

Analyzing and Interpreting Equity Accounts and Comprehensive Income Following is the shareholders' equity section of the 2010 balance sheet for Procter & Gamble Company and its statement of shareholders' equity.

June 30 (In millions, except per share amounts) 2010 2009
Shareholders' Equity
Convertible Class A preferred stock, stated value $ 1 per share (600 shares authorized) $ 1,277 $ 1,324
Non-voting Class B preferred stock, stated value $ 1 per share (200 shares authorized) -- --
Common stock, stated value $ 1 per share (10,000 shares authorized; shares issued: 2010-4,007.6, 2009-4,007.3) 4,008 4,007
Additional paid-in capital 61,697 61,118
Reserve for ESOP debt retirement (1,350) (1,340)
Accumulated other comprehensive income (loss) (7,822) (3,358)
Treasure stock, at cost (shares held: 2010-1,164.1, 2009-1,090.3) (61,309) (55,961)
Retained earnings 64,614 57,309
Noncontrolling interest 324 283
Total shareholders' equity $ 61,439 $ 63,382

Consolidated Statement of Shareholders' Equity
Dollars in millions; Shares in thousands Common Shares Outstanding Common Stock Preferred Stock Additional Paid-in Capital Reserve for ESOP Debt Retirement Accumu-lated Other Comprehensive Income (loss) Noncontrolling Interest Treasury Stock Retained Earnings Total
Balance June 30, 2009 2,917,035 $ 4,007 $ 1,324 $ 61,118 $ (1,340) $ (3,358) $ 283 $ (55,961) $ 57,309 $ 63,382
Net earnings 12,736 12,736
Other comprehensive income:
Financial statement translation (4,194) (4,194)
Net investement hedges, net of $ 520 tax 867 867
Defined benefit retirement plans, net of $ 465 tax (1,137) (1,137)
Total comprehensive income $ 8,272
Dividends to shareholders:
Common (5,239) (5,239)
Preferred, net of tax benefits (219) (219)
Treasury purchases (96,759) (6,004) (6,004)
Employee plan issuances 17,616 1 574 616 1,191
Preferred stock conversions 5,579 (47) 7 40 --
ESOP debt impacts (10) 27 17
Noncontrolling interest (2) 41 39
Balance June 30, 2010 2,843,471 $ 4,008 $ 1,277 $ 61,697 $ (1,350) $ (7,822) $324 $ (61,309) $ 64,614 $ 61,439

(a) What does the term convertible (in reference to the company's Class A preferred stock) mean?

Convertible means the holder of the security has an option to sell the security at any time.

Convertible means the holder of the security has an option to surrender the security and to receive cash at any time.

Convertible means the holder of the security has an option to convert (exchange) the security into another security.

Convertible means the holder of the security has an obligation to convert (exchange) the security into another security.

(b) How many shares of common stock did Procter & Gamble issue when convertible Class A preferred stock was converted during fiscal 2010? Answerthousand shares (c) For "employee plan issuances," at what average price was the common stock issued as of year-end 2010? (Round your answer to two decimal places.) $Answer (d) What is the accumulated other comprehensive income account? Explain.

The accumulated other comprehensive income account reflects the cumulative change in balance sheet accounts not recorded in net income nor arising from transitions with shareholders.

The accumulated other comprehensive income account reflects the cumulative profit recognized by the company less the cumulative dividends that have been paid to shareholders.

The accumulated other comprehensive income account reflects the cumulative amount by which the company's common stock has increased or decreased since issuance.

The accumulated other comprehensive income account reflects the cumulative profit on transactions with shareholders.

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