The stockholders" equity section of Lumley Corporation at December 31 is as follows.

Instructions 1 M "^ From a review ol the stockholders' equit) section, as chief accountant, write a memo to the president of the companj answering the following questions.

(a) How many shares ol common stock are outstanding'.'

(b) Assuming there is a stated value, what is the stated value of the common Stock?

(c) What is the par value ol the preferred stock

(d) II the annual dividend on preferred stock is $30,000, what is the dividend rate on preferred stock?

(e) It dividends of $60,000 were in arrears on preferred stock, what would be the balance in Retained Earnings?

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Paid-in capital LUMLEY CORPORATION Balance Sheet (partial) Preferred stock, cumulative. 10,000 shares authorized. 6.000 shares issued and outstanding Common stock, no par, 750,000 shares authorized. 600,000 shares issued Total paid-in capital Retained earnings Total paid-in capital and retained earnings Less. Treasury stock (12.000 common shares) Total stockholders' equity 5 600,000 1.200.000 1.800.000 1,858,000 3,658,000 (64.000) $3.594.000