The stockholders equity section of Monty Inc. at the beginning of the current year appears below. Common stock, $10 par value, authorized 928,000 shares, 292,000 shares issued and outstanding | | $2,920,000 | Paid-in capital in excess of parcommon stock | | 578,000 | Retained earnings | | 582,000 | During the current year, the following transactions occurred. 1. | | The company issued to the stockholders 95,000 rights. Ten rights are needed to buy one share of stock at $31. The rights were void after 30 days. The market price of the stock at this time was $33 per share. | 2. | | The company sold to the public a $191,000, 10% bond issue at 104. The company also issued with each $100 bond one detachable stock purchase warrant, which provided for the purchase of common stock at $29 per share. Shortly after issuance, similar bonds without warrants were selling at 96 and the warrants at $8. | 3. | | All but 4,750 of the rights issued in (1) were exercised in 30 days. | 4. | | At the end of the year, 80% of the warrants in (2) had been exercised, and the remaining were outstanding and in good standing. | 5. | | During the current year, the company granted stock options for 9,100 shares of common stock to company executives. The company, using a fair value option-pricing model, determines that each option is worth $10. The option price is $29. The options were to expire at year-end and were considered compensation for the current year. | 6. | | All but 910 shares related to the stock-option plan were exercised by year-end. The expiration resulted because one of the executives failed to fulfill an obligation related to the employment contract. | | | | |