Analytical case (part 2)—prepare owners’ equity amounts and disclosures for 2011 using transaction information. The transactions affecting the owners’ equity accounts of DeZurik Corp. for the year ended June 30, 2011, 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 2011 preferred dividends were paid in full. Assume that all 96,000 shares were outstanding throughout the year ended June 30, 2011.
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, 2011.
Required:
a. Calculate the dollar amounts that DeZurik Corp. would report for each owners’ equity caption on its June 30, 2011, balance sheet after recording the effects of transactions 1–6.. Indicate how the owners’ equity caption details for DeZurik Corp. would change for the June 30, 2011, balance sheet, as compared to the disclosures shown in Case 8.29 for the 2010 balance sheet.
c. What was the average issue price of common stock shown on the June 30, 2011, balance sheet?