Analyzing and Computing Issue Price, Treasury Stock Cost, and Shares Outstanding Following is the stockholders' equity section of the 2018 Merck & Co. Inc. balance sheet. Stockholders' Equity ($ millions, except par value) Common stock, $0.50 par value: 6,500,000 authorized shares: 2018 3.577,095.522 issued shares $1,789 Other paid-in capital 58,212 Retained earnings 63,869 Accumulated other comprehensive loss (8.318) Stockholders' equity before deduction for treasury stock $115,552 Less treasury stock, at cost: 984,543.979 shares Total Merck & Co. Inc. stockholders' equity a. Show the computation of the $1,789 million in the common stock account. 76,394 $39.158 shares x $ per share is approximately $ million on the balance sheet. b. At what average price were the Merck common shares issued? Note: Round your answers to two decimal places (for example, enter 67.49 for 67.48555). $ per share c. At what average cost was the Merck treasury stock purchased? Note: Round your answers to two decimal places (for example, enter 67.49 for 67.48555). $ per share d. How many common shares are outstanding as of December 31, 2018? shares outstanding e. Assume Merck's closing stock price is $76.41 per share on December 31, 2018. Use that amount to calculate the company's market cap for that day. million
Analyzing and Computing Issue Price, Treasury Stock Cost, and Shares Outstanding Following is the stockholders' equity section of the 2018 Merck & Co. Inc. balance sheet. Stockholders' Equity ($ millions, except par value) Common stock, $0.50 par value: 6,500,000 authorized shares: 2018 3.577,095.522 issued shares $1,789 Other paid-in capital 58,212 Retained earnings 63,869 Accumulated other comprehensive loss (8.318) Stockholders' equity before deduction for treasury stock $115,552 Less treasury stock, at cost: 984,543.979 shares Total Merck & Co. Inc. stockholders' equity a. Show the computation of the $1,789 million in the common stock account. 76,394 $39.158 shares x $ per share is approximately $ million on the balance sheet. b. At what average price were the Merck common shares issued? Note: Round your answers to two decimal places (for example, enter 67.49 for 67.48555). $ per share c. At what average cost was the Merck treasury stock purchased? Note: Round your answers to two decimal places (for example, enter 67.49 for 67.48555). $ per share d. How many common shares are outstanding as of December 31, 2018? shares outstanding e. Assume Merck's closing stock price is $76.41 per share on December 31, 2018. Use that amount to calculate the company's market cap for that day. million
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter11: Stockholders' Equity
Section: Chapter Questions
Problem 11.7E
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Transcribed Image Text:Analyzing and Computing Issue Price, Treasury Stock Cost, and Shares Outstanding
Following is the stockholders' equity section of the 2018 Merck & Co. Inc. balance sheet.
Stockholders' Equity ($ millions, except par value)
2018
Common stock, $0.50 par value: 6,500,000 authorized shares:
3.577,095,522 issued shares
$1,789
Other paid-in capital
58,212
Retained earnings
63,869
Accumulated other comprehensive loss
(8.318)
Stockholders' equity before deduction for treasury stock
$115,552
Less treasury stock, at cost: 984,543,979 shares
Total Merck & Co. Inc. stockholders' equity
a. Show the computation of the $1,789 million in the common stock account.
76.394
$39,158
shares x $
per share is approximately $
million on the balance sheet.
b. At what average price were the Merck common shares issued?
Note: Round your answers to two decimal places (for example, enter 67.49 for 67.48555).
per share
c. At what average cost was the Merck treasury stock purchased?
Note: Round your answers to two decimal places (for example, enter 67.49 for 67.48555).
per share
d. How many common shares are outstanding as of December 31, 2018?
shares outstanding
e. Assume Merck's closing stock price is $76.41 per share on December 31, 2018. Use that amount to calculate the company's market cap for that day.
million
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Step 1: Introduction of issue price
VIEWStep 2: Requirement a - Provide the calculation of the $1,789 million in the common stock account
VIEWStep 3: Requirement b - Computation of the average price of common shares issued
VIEWStep 4: Requirement c - Computation of the average cost of treasury stock purchased
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