Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The stockholders' equity section of Monty Inc. at the beginning of the current year appears below. Common stock, $10 par value, authorized 941,000 shares, 272,000
The stockholders' equity section of Monty Inc. at the beginning of the current year appears below. Common stock, $10 par value, authorized 941,000 shares, 272,000 shares issued and outstanding $2,720,000 Paid-in capital in excess of par-common stock 645,000 Retained earnings 600,000 During the current year, the following transactions occurred. 1. The company issued to the stockholders 108,000 rights. Ten rights are needed to buy one share of stock at $32. The rights were void after 30 days. The market price of the stock at this time was $34 per share. 2. The company sold to the public a $202,000, 10% bond issue at 103. The company also issued with each $100 bond one detachable stock purchase warrant, which provided for the purchase of common stock at $30 per share. Shortly after issuance, similar bonds without warrants were selling at 96 and the warrants at $7. 3. All but 5,400 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 9,000 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 $30. The options were to expire at year-end and were considered compensation for the current year. 6. All but 900 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. Cash 307800 Common Stock 102600 Paid-in Capital in Excess of Par - Common Stock 205200 Cash 46864 Paid-in Capital-Stock Warrants 11312 Common Stock Paid-in Capital in Excess of Par - Common Stock Compensation Expense 90000 Paid-in Capital-Stock Options 90000 For options exercised: Cash 234900 Paid-in Capital-Stock Options 81000 Common Stock 81000 Paid-in Capital in Excess of Par - Common Stock n Stock D 234900 For options lapsed: Paid-in Capital-Stock Options 9000 Compensation Expense 9000 Prepare the stockholders' equity section of the balance sheet at the end of the current year. Assume that retained earnings at the end of the current year is $786,000. Monty Inc. Balance Sheet e Textbook and Media
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started