Sage Financial Systems, Inc., has the following: Common stock, 6,000,000 shares, $2 par value ......$ 12,000,000 Paid-in

Question:

Sage Financial Systems, Inc., has the following:

Common stock, 6,000,000 shares, $2 par value ......$ 12,000,000

Paid-in capital in excess of par .............. 42,000,000

Total paid-in capital .................. 54,000,000

Retained earnings .................. 10,000,000

Stockholders’ equity ................ $ 64,000,000

Overall market value of stock @ assumed market price of

$28 per share .................. $168,000,000

Book value per share = $64,000,000 ÷ 6,000,000 = $10.67

The company used cash to reacquire and retire 300,000 shares for $28 each. Prepare the stockholders’ equity section before and after this retirement of shares. Also prepare the journal entry.

Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...