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

(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?