Reference no: EM131104522
Min Co. is a publicly held company whose shares are traded in the over-the-counter market. The stockholders' equity accounts at December 31, 2006 had the following balances:
Preferred stock, $100 par value, 6% cumulative; 5,000 shares authorized; 2,000 issued and outstanding ........................................................... $ 200,000
Common stock, $1 par value, 150,000 shares authorized;
100,000 issued and outstanding .................................. 100,000
Additional paid-in capital ............................................. 800,000
Retained earnings .................................................... 1,586,000
Total Stockholders' Equity ........................................ $2,686,000
Transactions during 2007 and other information relating to the stockholders' equity accounts were as follows:
- February 2, 2007-Issued 13,000 shares of common stock to Ram Co. in exchange for land. On the date issued, the stock had a market price of $11 per share. The land had a carrying value on Ram's books of $135,000, and an assessed value for property taxes of $90,000.
- March 2, 2007-Purchased 5,000 shares of its own common stock to be held as treasury stock for $14 per share. Min uses the cost method to account for treasury stock. Transactions in treasury stock are legal in Min's state of incorporation.
- May 11, 2007-Declared a property dividend of marketable securities held by Min to common shareholders. The securities had a carrying value of $600,000; fair value on relevant dates were:
Date of declaration (May 11, 2007) .................. $720,000
Date of record (May 28, 2007) ......................... 758,000
Date of distribution (June 4, 2007) ..................... 736,000
- October 1, 2007-Reissued 2,000 shares of treasury stock for $16 per share.
- November 2, 2007-Declared a cash dividend of $1.50 per share to all common shareholders of record November 16, 2007. The dividend was paid on November 26, 2007.
- December 21, 2007-Declared the required annual cash dividend on preferred stock for 2007. The dividend was paid on January 4, 2008.
- January 14, 2008-Before closing the accounting records for 2007, Min became aware that no amortization had been recorded for 2006 for a patent purchased on July 1, 2006. The patent was properly capitalized at $320,000 and had an estimated useful life of eight years when purchased. Min's income tax rate is 30%. The appropriate correcting entry was recorded on the same day.
- Adjusted net income for 2007 was $838,000.
Required
Determine the amounts of each of the following items. Show supporting calculations.
1. Prior period adjustment
2. Preferred dividends
3. Common dividends-cash
4. Common dividends-property
5. Number of common shares issued at December 31, 2007
6. Total legal capital of common stock issued
7. Additional paid-in capital, including treasury stock transactions
8. Total dollar amount of treasury stock
9. Numerator used in calculation of 2007 earnings per share for the year.