The stockholders' equity section of Creighton Company's balance sheet is shown as follows. CREIGHTON COMPANY As of
Question:
The stockholders' equity section of Creighton Company's balance sheet is shown as follows.
CREIGHTON COMPANY
As of December 31, 2018
Stockholders' equity
Preferred stock, $10 stated value, 7% cumulative,
300 shares authorized, 50 issued and outstanding.....................................................$ 500
Common stock, $10 par value, 250 shares authorized,
100 issued and outstanding.............................................................................................1,000
Common stock, class B, $20 par value, 400 shares
authorized, 150 issued and outstanding.........................................................................3,000
Common stock, no par, 150 shares authorized, 100 issued and outstanding...........2,200
Paid-in capital in excess of stated value-preferred............................................................600
Paid-in capital in excess of par value-common..............................................................1,200
Paid-in capital in excess of par value-class B common....................................................750
Retained earnings.............................................................................................................7,000
Total stockholders' equity ...........................................................................................$16,250
Required
a. Assuming the preferred stock was originally issued for cash, determine the amount of cash that was collected when the stock was issued.
b. Based on the class B common stock alone, determine the amount of the company's legal capital.
c. Based on the class B common stock alone, determine the minimum amount of assets that must be retained in the company as protection for creditors.
d. Determine the number of shares of class B common stock that are available to sell as of December 31, 2018.
e. Assuming Creighton purchases treasury stock consisting of 25 shares of its no par common stock on January 1, 2019, determine the amount of the no-par common stock that would be outstanding immediately after the purchase.
f. Based on the stockholders' equity section shown above, can you determine the market value of the preferred stock? If yes, what is the market value of one share of this stock?
Common StockCommon stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
a The amount of cash collected is the stated value of the stock plus the additional paid in capital ...View the full answer
Survey of Accounting
ISBN: 978-1259631122
5th edition
Authors: Thomas Edmonds, Christopher Edmonds, Philip Olds, Frances McNair, Bor Yi Tsay
