Styles LO 11-5 Exercise 11-128 Treasury stock transactions Earles Corporation repurchased 4,000 shares of its own stock for $30 per share. The stock has a par value of $10 per share. A month later, Earles resold 2,500 shares of the treasury stock for $35 per share Required What is the balance of the treasury stock account after these transactions? Summary of Treasury Stock Account 1. 2. Accounting for stock dividends Exercise 11-15B LO 11-7 Egrett Corporation issued a 4 percent stock dividend on 20,000 shares of its $10 par common stock. At the time of the dividend, the market value of the stock was $30 per share. Required Compute the amount of the stock dividend. b. Show the effects of the stock dividend on the financial statements using a horizontal statements model like the following one: Income Statement Balance Sheet Statement of Cash Flows +Ret. Earn. Exp. Net Inc. Llab. Com. Stk. Rev Assets + + PIC In Excess . b. Balance Sheet Stockholders' Equity Com. Stk.+PIC. Ex. +Ret. Ear. Income Statement Stmt. of Rev Exp. Net Inc. Assets Liab+ Cash Flow 2- A Emphasis Heading 1 THeading 2 1 Headin Styles Paragraph LO 11-7 Exercise 11-16B Determining the effects of stock splits on the accounting reconds The market value of Granger Corporation's common stock had become excessively high. The stock was currently selling for $240 per share. To reduce the market price of the common stock, Granger declared a 3-or-I stock split for the 200.000 outstanding shares of its $15 par common stock. Required a How will Granger Corporation's books be affected by the stock split? b. Determine the number of common shares outstanding and the par value after the split e. Explain how the market value of the stock will be affected by the stock split . b. C. 1 Heading 2 1 Heading Heading 1 D-A Emphasis Styles Paragraph Davis, Inc. and Royal, lnc. reported net incomes of $81,000 and $93,000, respectively, for their most recent fiscal years Both companies had 10,000 shares of common stock lesued and outstanding. The market price per share of Davis's stock was $130, while Royar's sold for $120 per share Required &Determine the P/E ratio for each company. (Round to the nearest whole namber.) Based on the P/E ratios computed in Requirement a, which company do investors believe has the greater potential for growth in income? . Computation of Price Earnings Ratio: Davis, Inc.: a. Earnings per Share (EPS): Net Income Common Shs. Outst. EPS Price/Earnings Ratio: Selling Price/Share =P/E Ratio Earnings per Share Royal, Inc.: Earnings Per Share (EPS): Net Income EPS Common Shs. Outst. Price/Earnings Ratio: Selling Price/hare = P/E Ratio Earnings per Share
