(Chapter 8) Please answer all questions with a red X next to them. Thank you!

Analyzing and Computing Average Issue Price and Treasury Stock Cost Assume this is the stockholders' equity section from the Campbell Soup Company balance sheet. Shareholders' Equity (millions, except per share amounts) August 3, 2008 July 29, 2007 Preferred stock: authorized 40 shares; non issued Capital stock, $0.0375 par value; authorized 560 shares; issued 582 shares Additional paid-in capital Earnings retained in the business Capital stock in treasury, 186 shares in 2008 and 163 shares in 2007, at cost Accumulated other comprehensive loss Total shareholders' equity 337 7,930 (6,812) (136) 1,341 331 (6,015) (123) 1,327 Assume Campbell Soup Company also reports the following statement of stockholders' equity Capital Stock Earnings Accumulated Other Total share- Additional Retained (Millions, except per share amounts) Issued in the Business In Treasury Paid-in Comprehensive ownerS Capital Income (Loss) Equity Shares Amount Shares Amount 582 $22 (163) $ (6,015) S331 $7,112 $ (123) $ 1,327 Balance at July 29, 2007 Comprehensive income (loss) Net earnings Foreign currency translation 1,175 1,175 112 112 adjustments, net of tax Cash-flow hedges, net of tax Pension and postretirement benefits, net of tax Other comprehensive loss Total comprehensive income Impact on adoption of FIN 48 Note (136) (136) (13) 1,162 (13) (10) (10) (347) (903) Dividends (50.88 per share) (347) Treasury stock purchased (26) 903) Treasury stock issued under management incentive and stock options plan 112 Balance at August 3, 2008 582 $22 (186) $ (6,812) $337 S 7,930 $ (136) $1,341 (a) Campbell Soup Company reports $22 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 issued shares multiplied by the market value of the stock. The computation uses the number of outstanding shares multiplied by the market price of the stock. The computation uses the number of outstanding shares multiplied by the par 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 a negative numbers.) S millions) Retained carnings, July 29, 2007 Net eernings Retained earnings, August 3, 2008 (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 3 million shares of stock for a total of $112 million that was recognized as a gain on sale, thus increasing Retained Earnings. The exercise of employee stock options resulted in the issuance of 3 million shares of stock for a total of $112 million that was recognized as a reduction of Treasury Stock and an increase in Additional Paid- In Capital.v The exercise of employee stock options resulted in the issuance of 3 million shares of stock for a total of $112 million that was recognized as an increase in the Common Stock and in the Additional Paid-lin Capital. OThe exercise of employee stock options resulted in the issuance of 3 million shares of stock for a total of $112 milion that was recognized as an increase in the Common Stock account only (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 26 million shares of common stock for a total of $903 million. The effect of the repurchase of stock is to recognize a loss on the repurchase, thus reducing Cash and Retained Earnings OCampbell Soup repurchased 26 million shares of common stock for a total of $903 million. This transaction had no effect on the components of Stockholders' Equity OCampbell Soup repurchased 26 million shares of common stock for a total of $903 million. The effect of this transaction is to increase Stockholders' Equity Campbell Soup repurchased 26 million shares of common stock for a total of $903 million. The effect of the repurchase of stock is to reduce Cash and Stockholders' Equity. Check