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ACTIVITY $78$

Purpose: stockholders' equity.

The COCA$-$COLA COMPANY

Shareowners'Equity December $31,2011$ $in millions

Common stock, $$\mathrm{.}25$ par value

Authorized: $5,600$ shares

Issued: $3,520$ shares

Capital surplus$*$

Reinvested earnings

Accumulated other comprehensive income $($loss$)$

Treasury shares, at cost $(1,257$ shares$)$

$$880$

$11,212$

$53,550$

$(2,703)$

Assume capital surplus is all from issuing common stock above par value.

Refer to the financial information above to answer the following questions.

Q$1$ The total amount of financing received from shareholders since incorporation is $ million and is generally referred to as Common stock of the Coca$-$Cola Company was originally issued $($above $/$ at $/$ below $/$ can't tell$)$ par at an average price of per share.

Q$2$ When additional shares of common stock are issued, this event will:

a$.($increase $/$ decrease $/$ have no effect on$)$ total assets,

b$.($increase $/$ decrease $/$ have no effect on$)$ net income,

c$.($increase $/$ decrease $/$ have no effect on$)$ stockholders' equity, and

d$.($increase $/$ decrease $/$ have no effect on$)$ earnings per share.

Q$3$ The amount of net income retained in the business and not yet distributed as dividends to the shareholders is $?$ million, which is generally referred to as

Q$4$ Retained earnings $($is $/$ is not$)$ a reservoir of cash available for dividends.

Q$5$ Treasury stock is considered $($issued $/$ outstanding $/$ retired$)$ but no longer $($issued $/$ outstanding retired$).$ The average price paid for treasury stock is approximately $ per share.

Q$6$ When a company buys back its own stock, this event will:

a$.($increase $/$ decrease $/$ have no effect on$)$ total assets,

b$.($increase $/$ decrease $/$ have no effect on$)$ net income,

c$.($increase $/$ decrease $/$ have no effect on$)$ stockholders' equity, and

d$.($increase $/$ decrease $/$ have no effect on$)$ earnings per share.

Q$7$ The number of common shares currently outstanding is $$ million shares, which represents $100\%$ ownership of the company.

Q$8$ Total stockholders' equity is: nillion, which is the amount of business assets owned by shareholders.

Q$9$ List several factors that would attract you to purchase shares of stock in a particular corporation.

Specific Accounts

Page $204$

Chapter $6$

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