Jones Company is authorized to issue 20,000 shares of no-par, $5 stated-value common stock and 5,000 shares of 9%, 100 par preferred stock. It enters into the following transaction:

1. Accepts a subscription contract to 7,000 shares of common stock at $42 per share and receives a 30% down payment

2. Collects the remaining balance of the subscription contract and issues the common stock

3. Acquires a building by paying $23,00 cash and issuing 2,,000 shares of common stock and 600 shares of preferred stock. Common stock is currently selling at $46 per share; preffed stock has no current market value. The building is appraised at $180,000

4. Sells 1,000 shares of common stock at $45 per share

5. Sells 900 shares of preferred stock at $112 per share

6. Declares a two-for-one stock split on the common stock, reducing the stated value to $2.50 per share

Raphael Corporation’s common stock is currently selling on a stock exchange at $85 per share, and its current balance sheet shows the following stockholders’ equity section:



Preferred stock—5% cumulative, $___ par value, 1,000 shares
authorized, issued, and outstanding $ 50,000
Common stock—$___ par value, 4,000 shares authorized, issued,
and outstanding 80,000
Retained earnings 150,000

Total stockholders' equity $ 280,000


4.
value:
10.00 points

Required:
1. What is the current market value (price) of this corporation’s common stock?

10

Step 1: Calculate the amount of the down payment received from the subscription contract:

- Number of shares subscribed: 7,000 shares
- Down payment received: 30% of the subscription price
- Subscription price: $42 per share
- Down payment received = 7,000 shares * $42 per share * 30% = $88,200

Step 2: Calculate the remaining balance to be collected from the subscription contract:
- Subscription price: $42 per share
- Number of shares subscribed: 7,000 shares
- Remaining balance = (Subscription price * Number of shares) - Down payment received
- Remaining balance = ($42 per share * 7,000 shares) - $88,200 = $204,600 - $88,200 = $116,400

Step 3: Calculate the value of the building acquired:
- Cash paid: $23,000
- Common stock issued: 2,000 shares * $46 per share = $92,000
- Preferred stock issued: 600 shares * $100 par value = $60,000
- Total value of the building acquired = Cash paid + Common stock issued + Preferred stock issued
- Total value of the building acquired = $23,000 + $92,000 + $60,000 = $175,000

Step 4: Calculate the cash received from the sale of common stock:
- Number of shares sold: 1,000 shares
- Selling price: $45 per share
- Cash received from the sale of common stock = Number of shares sold * Selling price
- Cash received from the sale of common stock = 1,000 shares * $45 per share = $45,000

Step 5: Calculate the cash received from the sale of preferred stock:
- Number of shares sold: 900 shares
- Selling price: $112 per share
- Cash received from the sale of preferred stock = Number of shares sold * Selling price
- Cash received from the sale of preferred stock = 900 shares * $112 per share = $100,800

Step 6: Calculate the new stated value of the common stock after the stock split:
- Previous stated value: $5 per share
- Stock split ratio: 2-for-1
- New stated value = Previous stated value / Stock split ratio
- New stated value = $5 per share / 2 = $2.50 per share

Note: The calculations above assume that there are no additional transactions or adjustments that need to be accounted for.

To answer this question, we need to track the various transactions and their impact on the authorized and issued shares of common and preferred stock, as well as the financial implications. Let's go step by step:

1. Accepts a subscription contract to 7,000 shares of common stock at $42 per share and receives a 30% down payment:
- Authorized shares: No changes.
- Common stock issued: 7,000 x 0.30 = 2,100 shares
- Common stock subscribed: 7,000 - 2,100 = 4,900 shares

2. Collects the remaining balance of the subscription contract and issues the common stock:
- Common stock issued: 4,900 shares (no changes)

3. Acquires a building by paying $23,000 cash and issuing 2,000 shares of common stock and 600 shares of preferred stock:
- Authorized shares: No changes.
- Common stock issued: 2,100 + 2,000 = 4,100 shares
- Preferred stock issued: 600 shares

4. Sells 1,000 shares of common stock at $45 per share:
- Authorized shares: No changes.
- Common stock issued: 4,100 - 1,000 = 3,100 shares

5. Sells 900 shares of preferred stock at $112 per share:
- Authorized shares: No changes.
- Preferred stock issued: 600 - 900 = (300) shares (assuming preferred stock can be cancelled)

6. Declares a two-for-one stock split on the common stock, reducing the stated value to $2.50 per share:
- Authorized shares: No changes.
- Common stock issued: 3,100 x 2 = 6,200 shares
- Stated value per share: $5 -> $2.50

To summarize the outcome:
- Authorized shares of no-par, $5 stated-value common stock: 20,000 shares
- Authorized shares of 9%, $100 par preferred stock: 5,000 shares
- Common stock issued: 6,200 shares
- Preferred stock issued: 300 shares

Please note that this summary only shows the changes in the authorized and issued shares and does not include the financial impact of the transactions. To fully understand the financial implications, additional information such as the total cash inflow from stock sales and the total cash outflow for the building acquisition is required.