(Learning Objective 2, 3, 4, 5: Inferring transactions from a company’s stockholders’ equity) OPTICAL PRODUCTS COMPANY reported the following shareholders’ equity on its balance sheet:
|
Shareholders’ Equity |
December 31, |
|
|
(Dollars and shares in millions) |
20X9 |
20X8 |
|
Preferred stock—$1 per share par value; authorized 20 shares; Convertible Preferred Stock; issued and outstanding: 20X9 and 20X8—6 and 12 shares, respectively |
$ 6 |
$ 12 |
|
Common stock—$1 per share par value; authorized 1,000 shares; issued: 20X9 and 20X8—564 and 364 shares, respectively |
564 |
364 |
|
Additional paid in capital |
2,706 |
1,536 |
|
Retained earnings |
6,280 |
5,006 |
|
Treasury stock, common—at cost 20X9—49 shares; 20X8—9 shares |
(1,235) |
(215) |
|
Total shareholders’ equity |
8,321 |
6,703 |
|
Total liabilities and shareholders’ equity |
$48,918 |
$45,549 |
Required
1. What caused OPTICAL PRODUCTS’ preferred stock to decrease during 20X9? Cite all the possible causes.
2. What caused OPTICAL PRODUCTS’ common stock to increase during 20X9? Identify all the possible causes.
3. How many shares of OPTICAL PRODUCTS’ common stock were outstanding at December 31, 20X9?
4. OPTICAL PRODUCTS’ net income during 20X9 was $1,410 million. How much were OPTICAL PRODUCTS’ dividends during the year?
5. During 20X9, OPTICAL PRODUCTS sold no treasury stock. What average price per share did OPTICAL PRODUCTS pay for the treasury stock the company purchased during 20X9?