Problem 8-22      Analyzing the stockholders’ equity section of the balance sheet

The stockholders’ equity section of the balance sheet for Brawner Company at December 31, 2012, is as follows:

 

 

 

 

authorized, 50,000 shares issued and ? outstanding	500,000	Â
Paid-in capital in excess of par—Preferred	30,000
Paid-in capital in excess of stated value—Common	  200,000
Total paid-in capital	Â	$1,030,000
Retained  earnings	Â	250,000
Treasury stock, 1,000 shares	Â	   (100,000)
Total stockholders’ equity	Â	$1,180,000

Note: The market value per share of the common stock is $25, and the market value per share of the preferred stock is $12.

Required

a.     What is the par value per share of the preferred stock?

b.     What is the dividend per share on the preferred stock?

c.     What is the number of common stock shares outstanding?

d.     What was the average issue price per share (price for which the stock was issued) of the com- mon stock?

e.     Explain the difference between the average issue price and the market price of the common stock.

f.     If Brawner declared a 2-for-1 stock split on the common stock, how many shares would be outstanding after the split? What amount would be transferred from the retained earnings account because of the stock split? Theoretically, what would be the market price of the common stock immediately after the stock split?