Analytical case:
Prepare stockholders' equity amounts and disclosures for 2014 using transaction information.The transactions affecting the stockholders' equity accounts of DeZurik Corp. for the year ended June 30, 2014, are summarized here:
1. 320,000 shares of common stock were issued at $14.25 per share.
2. 80,000 shares of treasury (common) stock were sold for $18 per share.
3. Net income for the year was $1,280 (in thousands).
4. The fiscal 2014 preferred dividends were paid in full. Assume that all 96,000 shares were outstanding throughout the year ended June 30, 2014.
5. A cash dividend of $.20 per share was declared and paid to common stockholders. Assume that transactions 1 and 2 occurred before the dividend was declared.
6. The preferred stock was split 2 for 1 on June 30, 2014. (Note: This transaction had no effect on transaction 4.)
Required:
a. Calculate the dollar amounts that DeZurik Corp. would report for each stockholders' equity caption on its June 30, 2014, balance sheet after recording the effects of transactions 1-6. Note that total stockholders' equity at June 30, 2014, is provided as a check figure.
b. Indicate how the stockholders' equity caption details for DeZurik Corp. would change for the June 30, 2014, balance sheet, as compared to the disclosures shown in Case for the 2013 balance sheet.
c. What was the average issue price of common stock shown on the June 30, 2014, balance sheet?