LUMLEY CORPORATION

Balance Sheet (partial)

Paid-in capital

Preferred stock, cumulative, 10,000 shares authorized, 6,000 shares issued and outstanding $600,000

Common stock, $2 par, 750,000 shares authorized, 500,000 shares issued 1,000,000

Paid-in capital in excess of par common 200,000

Total paid-in capital 1,800,000

Retained earnings 1,858,000

Total paid-in capital and retained earnings 3,658,000

Less: Treasury stock (12,000 common shares) 64,000

Total stockholders equity $3,594,000

a) How many shares of common stock are outstanding?

b) At what average price per share was the common stock issued?

c) What is the par value of the preferred stock?

d) If the annual dividend on preferred stock is $36,000, what is the dividend rate on preferred stock?

e) Since the inception of the company, what has been the total excess of net income over dividends declared?

f) If dividends of $72,000 were in arrears on preferred stock, what would be the balance in Retained Earnings?