Calculation of preferred stock, common stock and selling price.
Interpreting The Stockholder's Equity Section of the Balance Sheet
Hampton Inc. began operations on January 1, 2007. On December 31, 2008, it reported the following stockholders equity section of its balance sheet.
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December 31
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2008
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2007
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Stockholders' equity
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|
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7% cumulative preferred stock, $100 par value
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$300,000
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$300,000
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Common stock, $2 par value
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150,000
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120,000
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Paid-in capital in excess of par value
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830,000
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620,000
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Retained earnings
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362,000
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157,500
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Treasury stock
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(16,800)
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(25,725)
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Total stockholders' equity
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$1,625,700
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$1,171,775
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The company has a policy of paying out 10% of its net income as cash dividends. The date of declaration is always 30 days after the end of the year, and the date of payment occurs 60 days after the end of the year. At year-end 2007, the average price of treasury stock was $10.50. At year-end 2008, the average price of treasury stock was $12.
Required.
A. How many preferred shares have been issued as of year-end 2007 and 2008?
B. How many common shares have been issued as of year-end 2007? As of year-end 2008?
C. How many treasury shares are there at year-end 2007? At year-end 2008?
D. How many common shares are outstanding at year-end 2007? At year-end 2008?
E. What was the average price (at original issuance) of common stock as of year-end 2007?
F. What was the average selling price of the shares during 2008?
G. What was net income for 2007? For 2008?
H. What was the dividend per share paid to preferred stock on March 1, 2008?
I. What was the dividend per share paid to common stock on March 1, 2008?
J. What is the dividend per share that is scheduled to be paid to common stock on March 1, 2009? Why?