The balance sheet of Creative Communications, Inc., reported the following:

Preferred dividends are in arrears for three years including the current year. On the balance sheet date, the market value of the Creative Communications common stock is $14 per share.

Requirements 

1. Is the preferred stock cumulative or noncumulative? How can you tell?

2. Which class of stockholders controls the company? Give your reason

3. What is the total paid-in capital of the company?

4. What was the total market value of the common stock?

5. Compute the book value per share of the common stock.

Transcribed Image Text:

Paid-in capital: Stockholders' Equity Preferred stock; nonvoting; no par, $3; 8,000 shares issued........ $320,000 Common stock; $1.50 par; 40,000 shares issued................ 60,000 Additional paid-in capital-common. 240,000 620,000 Retained earnings......... 130,000 Total stockholders' equity. $750,000