Problem
I. Novavax Inc. reported the following financial data in its annual report from 2018. The fiscal year follows the calendar year and ends on December 31, 2018. It had net income attributable to common shareholders for the fiscal year ending 2018 of $985 million. It paid $108 million of dividends to common shareholders, and $27 million of dividends to preferred shareholders. The company had 9,000,000 common shares outstanding at the start of the year, issued 4,000,000 shares of common stock on May 1, and bought back 5,000,000 common shares on October 30. The company had 1,500,000 preferred shares outstanding for the entirety of the year.
i. How much was the company's basic earnings per share (round to the nearest cent)?
II. The stockholders' equity accounts of Gandalf, Inc. include the following at December 31, 2016:
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Common stock, $2.00 par value, 60,000,000,000,000 shares authorized; 40,000 shares outstanding
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$80,000
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Additional paid-in capital in excess of par value
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120,000
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Accumulated other comprehensive income / (loss)
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(16,500)
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Retained earnings
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380,000
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Total equity
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$563,500
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During 2017, the following transactions occurred:
Feb 15 Declared and issued cash dividends of $0.75 per share
Dec 31 Recorded an unrealized gain on foreign currency translation adjustments of $27,500
Dec 31 Recorded net income of $450,000
i. Calculate the year-ending balance of retained earnings for December 31, 2017.
ii. Calculate the year-ending balance of accumulated other comprehensive income / (loss) for December 31, 2017.
III. Paddy's Pub's statement of stockholders' equity on December 31, 2016 is as follows:
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4% cumulative preferred stock, $45 par,10,000 shares authorized; 7,000 shares issued and outstanding
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$315,000
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Common stock, $1 par, 900,000 shares authorized; 475,000 shares issued and outstanding
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475,000
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Paid-in capital in excess of par - Preferred stock
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25,000
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Paid-in capital in excess of par - Common stock
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5,825,000
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Retained earnings
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360,000
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Total stockholders' equity
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$7,000,000
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The following transactions occurred during 2017:
Mar 27 Issued 100,000 shares of common stock for $12 per share with a $1 par.
Jun 15 Repurchased 75,000 shares of common stock at $9.75 per share.
Oct 24 Reissued 12,500 shares of treasury stock bought on June 15 for $16 per share.
i. Record (and date or number) the journal entries to record each of these transactions.
IV. On Monday morning at 9:30 AM, you own one share of Amazeslapple stock, trading at a price of $200 per share. The company announces a 10-for-1 stock split, which will take place at the end of the trading day tomorrow (Tuesday). The closing price on Tuesday is exactly $220 per share, and the split then happens based on this closing price.
Answer the following:
i. How many shares of Amazeslapple do you own after the split?
ii. What's the price of each of those Amazeslapple shares after the split?
iii. What's the total dollar amount of your investment in Amazeslapple after the split?