Analyzing and Computing Average Issue Price and Treasury Stock Cost Following is the stockholders’ equity section from the Campbell Soup Company balance sheet. (Note:

Campbell’s uses shareowners’ equity in lieu of the more common title of stockholders’ equity.)

Shareowners’ Equity (millions, except per share amounts) July 31, 2016 August 2, 2015 Preferred stock: authorized 40 shares; none issued . . . . . . . . . . . $— $—

Capital stock, $.0375 par value; authorized 560 shares;

issued 323 shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 12 Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354 339 Earnings retained in the business . . . . . . . . . . . . . . . . . . . . . . . . . 1,927 1,754 Capital stock in treasury, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . (664) (556)

Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . (104) (168)

Total Campbell Soup Company shareowners’ equity . . . . . . . . . . 1,525 1,381 Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 (4)

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,533 $1,377 Campbell Soup Company also reports the following statement of stockholders’ equity.

(millions, except per share amounts)

Capital Stock Additional Paid-in Capital Earnings Retained in the Business Accumulated Other Comprehensive Income (Loss)

Noncontrolling Interests Total Equity Issued In Treasury Shares Amount Shares Amount Balance at August 2, 2015 . . . . . . . . . . . . . . . . 323 $12 (13) $(556) $339 $1,754 $(168) $(4) $1,377 Contribution from noncontrolling interests. . . . —

Noncontrolling Interests Other Activity. . . . . . . 9 9 Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . 563 563 Other comprehensive income (loss). . . . . . . . . 64 3 67 Dividends ($1.248 per share) . . . . . . . . . . . . . . (390) (390)

Treasury stock purchased . . . . . . . . . . . . . . . . (3) (143) (143)

Treasury stock issued under management incentive and stock option plans . . . . . . . .

1 35 15 50 Balance at July 31, 2016 . . . . . . . . . . . . . . . . . 323 $12 (15) $ (664) $354 $1,927 $(104) $ 8 $1,533

a. Show the computation, using par value and share numbers, to arrive at the $12 million in the capital

(common) stock account.

b. At what average price were the Campbell Soup shares issued?

c. Reconcile the beginning and ending balances of retained earnings.

d. Campbell Soup reports an increase in shareowners’ equity relating to the exercise of stock options

(titled “Treasury stock issued under management incentive and stock option plans”). This transaction involves the purchase of common stock by employees at a preset price. Describe how this set of transactions affects stockholders’ equity.

e. Describe the transaction relating to the “Treasury stock purchased” line in the statement of shareowners’

equity.