Acc 206 Wk 2 Essay

1347 WordsAug 31, 20156 Pages
ACC 206 Week Two Assignment Please complete the following exercises below in either Excel or a word document (but must be single document). You must show your work where appropriate (leaving the calculations within Excel cells is acceptable). Save the document, and submit it in the appropriate week using the Assignment Submission button. 1. Analysis of stockholders' equity Star Corporation issued both common and preferred stock during 20X6. The stockholders' equity sections of the company's balance sheets at the end of 20X6 and 20X5 follow: 20X6 20X5 Preferred stock, $100 par value, 10% $580,000 $500,000 Common stock, $10 par value 2,350,000 1,750,000 Paid-in capital in excess of par value Preferred 24,000 — Common 4,620,000 3,600,000 Retained earnings 8,470,000 6,920,000 Total stockholders' equity $16,044,000 $12,770,000 a. Compute the number of preferred shares that were issued during 20X6. Preference stock (100 par value) issued during 20X6 = 580,000 – 500,000 = $80,000 Number of preference shares issued during 20X6 = Par value of preferred shares issued / Par value per share of preferred shares = 80,000 / 100 = 800 shares b. Calculate the average issue price of the common stock sold in 20X6. Common stock (10 par value) sold in 20X6 = 2,350,000 – 1,750,000 = $600,000 Number of common stock sold = 600,000 / 10 = 60,000 shares Additional paid in capital = 4,620,000 - 3,600,000= $1,020,000 Average issue price of common stock sold in 20X6: Par value of common stock issued 600,000 (+) Additional paid in capital : Common stock 1,020,000 Total issue price of common stock 1,620,000
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