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M8–22. Identifying Financial statement Effects of Stock Issuance and Repurchase (LO1). On January 1, Bartov Company issues 7,000 shares of $100 par value preferred stock at $250 each per share. On March 1, the company repurchases 7,000 shares of previously issued $1 par value common stock at $92 cash per share. Use the financial statement effects template to record these two transactions. Date Description Post ref Debit Credit Jan 1 Cash $1,750,000 Preferred stock $700,000 Additional paid-in capital, preferred stock $1,050,000 7,000 shares of preferred stock issued March 1 Common stock, $1 par value $7,000 Additional paid-in capital $637,000 Treasury stock $644,000 7,000 shares of common stock repurchased Balance Sheet Income Statement Transaction Cash Asset Noncash Asset Liability Contri Capital Earned capital Revenue Expense Net Income M8-24 Reconcile Common Stock and Treasury Stock Balances Following is the stockholders equity section from the Abercrombie & Fitch Co balance sheet Stockholders’ equity ($ thousands except par value amounts) February 2, 2013 January 28, 2012 Class A common Stock – 001 par value; 150,000 shares authorized and 103,300 shared issued at each of February 2, 2013 and January 28, 2012 1,033 1,033 Paid in Capital 403,271 369,171 Retain earnings 2,567,261 2,389,614 Accumulated other comprehensive (loss) income, net of tax (13,288) 6,291 Treasury stock at average cost: 24,855 and 17,662 shares at February 2, 2013 and January 28, 2012 respectively (1,140,009) (834,774) Total stockholders equity 1,818,268 1,931,335 a. Show the computation to yield that $1,033 balance reported for common stock. b. How many shares are outstanding at 2013 fiscal year-end E8-34. Identifying and analyzing financial statement effects of stock transaction (LO1) Lipe company reports the following transactions relating to its stock accounts in the current year Feb 20 - Issued 10,000 shares of $1 par value common stock at $20 cash per share Feb 21 - Issued 15,000 shares of $100 par value, 8% preferred stock at $250 cash per share June 30 – Purchased 3,000 shares of its own common stock at $15 cash per share Sep 25 – Sold 1,500 shares of its treasury stock at $18 cash per share Balance Sheet Income Statement Transaction Cash Asset Noncash Asset Liability Contri Capital Earned capital Revenue Expense Net Income Feb 20 - Issued 10,000 shares of $1 par value common stock at $20 cash per share 100,000 Feb 21 - Issued 15,000 shares of $100 par value, 8% preferred stock at $250 cash per share June 30 – Purchased 3,000 shares of its own common stock at $15 cash per share Sep 25 – Sold 1,500 shares of its treasury stock at $18 cash per share E8-40. Analyzing Cash Dividends on Preferred and common Stock (LO2). Skinner Company began business on June 30, 2012. At that time it issued 18,000 shares of $50 par value, 8% cumulative preferred stock and 100,000 shares of $10 par value common stock. Through the end of 2014, there has been no change in the number of preferred and common shares outstanding a. Assume that Skinner declared and paid cash dividend of $84,000 in 2012, $0 in 2013 and 378,000 in 2014. Compute the total cash dividends and the dividends per share paid to each class of stock in 2012, 2013 and 2014. b. Assume that Skinner declared and paid cash dividend of $0 in 2012, 144,000 in 2013 and $189,000 in 2014 Compute the total cash dividends and the dividends per share paid to each class of stock in 2012, 2013 and 2014

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