Jumbo Corporation reported the following information about its stock on its December 31, 2018, balance sheet: Preferred

Question:

Jumbo Corporation reported the following information about its stock on its December 31, 2018, balance sheet:
Preferred stock, $100 par value, 6% cumulative, 30,000 shares authorized 1,000 shares issued and outstanding $100,000
Common stock, $10 par value, 150,000 shares authorized 50,000 shares issued and outstanding 500,000
Jumbo Corporation engaged in the following stock transactions during 2019:
Mar. 1 Issued 10,000 shares of common stock for cash.
Apr. 1 Purchased 2,000 shares of common stock as treasury stock.
Aug. 1 Resold 1,000 shares of treasury stock.
Sept. 1 Declared and distributed a 50% stock dividend on common stock.

Required:
1. Does Jumbo Corporation have a simple or complex capital structure?
2. Calculate the number of shares that Jumbo would use to calculate basic EPS for its 2019 income statement.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

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