Posted in (Learning Objective 3: Using a statement of stockholders’ equity) Datacom Services, Inc., reported the following statement of stockholders’ equity for the year ended October 31, 20X7.
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Datacom Services, Inc. Statement of Stockholders’ Equity Year Ended October 31, 20X7 |
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(In millions) |
Common Stock |
Additional Paid-in Capital |
Retained Earnings |
Treasury Stock |
Total |
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Balance, Oct. 31, 20X6 |
$427 |
$1,622 |
$904 |
$(117) |
$2,836 |
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Net income |
360 |
360 |
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Cash dividends |
(194) |
(194) |
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Issuance of stock (13 shares) |
13 |
36 |
49 |
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Stock dividend |
44 |
122 |
(166) |
– |
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Sale of treasury stock |
11 |
9 |
20 |
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Balance, Oct. 31, 20X7 |
$484 |
$1,791 |
$904 |
$108 |
$3,071 |
Required
Answer these questions about Datacom Services’ stockholders’ equity transactions:
1. The income tax rate is 40%. How much income before income tax did Datacom report on the income statement?
2. What is the par value of the company’s common stock?
3. At what price per share did Datacom Services issue its common stock during the year?
4. What was the cost of treasury stock sold during the year? What was the selling price of the treasury stock sold? What was the increase in total stockholders’ equity?
5. Datacom Services’ statement lists the stock transactions in the order they occurred. What was the percentage of the stock dividend?
