2. Equity section of Barr Company includes:

Common stock, $5 par, 1000,000 shares authorized 500,000

Additional paid in capital-common stock 100,000

Preferred stock, 5% cumulative, $6 par, 10,000 shares outstanding 60,000

Retained earnings 40,000

Total stockholders equity 700,000

a.) Assume the common stock was issued for $6 per share in 2011. In 2012, the company reacquired 5,000 shares of its common stock for $8 per share. How much should be reported on the companys balance sheet for treasury stock at the end of 2012? How much should be reported for the total stockholders equity on the balance sheet? How many common shares are outstanding? Assume the company resold 1,000 shares of its treasury stock in 2013 for $4 per share. Record the journal entry?

b.) Assume no dividends were declared in 2011 or 2012. During 2013, Barr plans to pay dividends total $10,000. Determine how much dividends should be paid to common and preferred shareholders in 2013.

c.) Assume no dividend in arrear, during 2013, Barr plans to pay dividends that total $2,000. How much will be distributed to preferred and common stock?