Analyzing and Computing Average Issue Price and Treasury Stock Cost Following is the stockholders' equity section from the Campbell Soup Company balance sheet. Campbell Soup Company also reports the following statement of stockholders' equity. (a) Campbell Soup Company reports 520 million in its Common Stock account. Which of the following statements best describes the manner in which this number is computed? The computation uses the number of issued shares multiplied by the par value of the stock. OThe computation uses the number of outstanding shares multiplied by the par value of the stock. The computation uses the number of outstanding shares multiplied by the market price of the stock. OThe computation uses the number of issued shares multiplied by the market value of the stock. (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.) (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? OThe exercise of employee stock options resulted in the issuance of 7 million shares of stock for a total of $216 million that was recognized as a reduction of Treasury Stock and an increase in Additional Paid-In Capital. OThe exercise of employee stock options resulted in the issuance of 7 million shares of stock for a total of $216 million that was recognized as an increase in the Common Stock account only. OThe exercise of employee stock options resulted in the issuance of 7 million shares of stock for a total of $216 million that was recognized as an increase in the Common Stock and in the Additional Paid-In Capital. OThe exercise of employee stock options resulted in the issuance of 7 million shares of stock for a total of $216 million that was recognized as a gain on sale, thus increasing Retained Earnings. (e) Which of the following statements best describes the transaction relating to the "Treasury stock purchased" line in the statement of stockholders' equity? OCampbell Soup repurchased 14 million shares of common stock for a total of $472 million. This transaction had no effect on the components of Stockholders' Equity. OCampbell Soup repurchased 14 million shares of common stock for a total of $472 million. The effect of the repurchase of stock is to reduce Cash and Stockholders' Equity. OCampbell Soup repurchased 14 million shares of common stock for a total of $472 million. The effect of the repurchase of stock is to recognize a loss on the repurchase, thus reducing Cash and Retained Earnings. QCampbell Soup repurchased 14 million shares of common stock for a total of $472 million. The effect of this transaction is to increase Stockholders' Equity. (f) Campbell Soup's stock price was $35.90 on July 30, 2010 (the closest trading day to fiscal year-end). Determine the company's market capitalization that day. Enter answers in millions. Round answer to the nearest million. $ million (g) Calculate and interpret the company's market-to-book ratio at July 30, 2010 . Analyzing and Computing Average Issue Price and Treasury Stock Cost Following is the stockholders' equity section from the Campbell Soup Company balance sheet. Campbell Soup Company also reports the following statement of stockholders' equity. (a) Campbell Soup Company reports 520 million in its Common Stock account. Which of the following statements best describes the manner in which this number is computed? The computation uses the number of issued shares multiplied by the par value of the stock. OThe computation uses the number of outstanding shares multiplied by the par value of the stock. The computation uses the number of outstanding shares multiplied by the market price of the stock. OThe computation uses the number of issued shares multiplied by the market value of the stock. (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.) (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? OThe exercise of employee stock options resulted in the issuance of 7 million shares of stock for a total of $216 million that was recognized as a reduction of Treasury Stock and an increase in Additional Paid-In Capital. OThe exercise of employee stock options resulted in the issuance of 7 million shares of stock for a total of $216 million that was recognized as an increase in the Common Stock account only. OThe exercise of employee stock options resulted in the issuance of 7 million shares of stock for a total of $216 million that was recognized as an increase in the Common Stock and in the Additional Paid-In Capital. OThe exercise of employee stock options resulted in the issuance of 7 million shares of stock for a total of $216 million that was recognized as a gain on sale, thus increasing Retained Earnings. (e) Which of the following statements best describes the transaction relating to the "Treasury stock purchased" line in the statement of stockholders' equity? OCampbell Soup repurchased 14 million shares of common stock for a total of $472 million. This transaction had no effect on the components of Stockholders' Equity. OCampbell Soup repurchased 14 million shares of common stock for a total of $472 million. The effect of the repurchase of stock is to reduce Cash and Stockholders' Equity. OCampbell Soup repurchased 14 million shares of common stock for a total of $472 million. The effect of the repurchase of stock is to recognize a loss on the repurchase, thus reducing Cash and Retained Earnings. QCampbell Soup repurchased 14 million shares of common stock for a total of $472 million. The effect of this transaction is to increase Stockholders' Equity. (f) Campbell Soup's stock price was $35.90 on July 30, 2010 (the closest trading day to fiscal year-end). Determine the company's market capitalization that day. Enter answers in millions. Round answer to the nearest million. $ million (g) Calculate and interpret the company's market-to-book ratio at July 30, 2010