Analyzing and Computing Average Issue Price and Treasury Stock Cost Following is the stockholders equity section from
Question:
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.).
Shareholders' Equity (millions, except per share amounts) | July 31, 2016 | August 2, 2015 |
---|---|---|
Preferred stock: authorized 40 shares; non 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 |
Non-controlling interests | 8 | (4) |
Total equity | $1,533 | $1,377 |
Campbell Soup Company also reports the following statement of stockholders' equity.
Campbell Soup Company | |||||||||
---|---|---|---|---|---|---|---|---|---|
(Millions, except per share amounts) | Additional Paid-in Capital | Earnings Retained in the Business | Accumulated Other Comprehensive Income (Loss) | Non-controlling | Total | ||||
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 non-controlling interests | - | ||||||||
Non-controlling 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) Campbell Soup Company reports $12 million in its Common Stock account. Which of the following statements best describes the manner in which this number is computed?
(b) At what average price were the Campbell Soup shares issued? (Round your answer to two decimal places.)
(c) Reconcile the beginning and ending balances of retained earnings.
(Enter any deductions as negative numbers)
($ millions) | |
---|---|
Retained earnings, August 2, 2015 | $____________ |
Net earnings | $____________ |
Dividends | $_____________ |
Miscellaneous | $_____________ |
Retained earnings, July 31, 2016 | $_____________ |
(d) Campbell Soup reports an increase in stockholders' 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. Which of the following statements best describes the nature of this transaction?
(e) Which of the following statements best describes the transaction relating to the "Treasury stock purchased" line in the statement of stockholders' equity?
Accounting Tools for Business Decision Making
ISBN: 978-1118128169
5th edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso