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Mastery Problem: Corporations: Organization, Stock Transactions, and Dividends Pranks, Inc. Pranks, Inc. is a manufacturer of joke and novelty products for perpetrators of practical jokes.

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Mastery Problem: Corporations: Organization, Stock Transactions, and Dividends Pranks, Inc. Pranks, Inc. is a manufacturer of joke and novelty products for perpetrators of practical jokes. The corporation has stockholders as the calendar year-end approaches. You've been brought in as a consultant to assist with this proces stock dividend is made. The company has two classes of stock: common stock and cumulative preferred stock. Number of common shares authorized 900,000 Number of common shares issued 750,000 Par value of common shares $20 Par value of cumulative preferred shares $30 Paid-in capital in excess of par-common stock $7,000,000 Paid-in capital in excess of par preferred stock Total retained earnings before the stock dividend is declared $33,500,000 No treasury share have been reissued. $0 Preferred Dividends Common Dividends Total Cash Dividends Year Total Per Share Total Per Share Year 1 40,000 40.000 0.20 0 0.00 Year 2 72,000 72,000 0.36 0 0.00 Year 3 113,000 0.34 0.09 68,000 60,000 45,000 75,000 Year 4 135,000 0.3 0.15 Year 5 150,000 60.000 0.3 90,000 0.18 Year 6 210.000 60,000 0.3 150,000 0.3 Cash Dividends The accounting manager for the company prepared the schedule of cash dividends paid from Year 1 to Year 6 on the away on vacation and is unreachable by phone because he is backpacking on a remote island that does not have cell regarding its outstanding stock maury Preferred Dividends Common Dividends Total Cash Dividends Year Total Per Share Total Per Share 0.20 0 0.00 Year 1 Year 2 40,000 72,000 40,000 72,000 0.36 0 0.00 Year 3 113,000 68,000 0.34 45,000 0.09 Year 4 135,000 60,000 0.3 75,000 0.15 Year 5 150,000 60,000 0.3 90,000 0.18 Year 6 210,000 60,000 0.3 150,000 0.3 Cash Dividends The accounting manager for the company prepared the schedule of cash dividends paid from Year 1 to Vear 6 on the Pranks, Inc. pa away on vacation and is unreachable by phone, because he is backpacking on a remote island that does not have cell phone recepti regarding its outstanding stock, Fill in the following answers How many shares of common stock are outstanding? How many shares of preferred stock are outstanding? What is the preferred dividend as a percent of par? Additional Questions 1. After completing the Cash Dividends panel answer the following question Does Pranks, Inc. have any treasury stock? How can you tell? The accounting manager for the company prepared the schedule of cash dividends paid from Year 1 to Year 6 on the Pranks, Inc. away on vacation and is unreachable by phone, because he is backpacking on a remote island that does not have cell phone rece regarding its outstanding stock. Fill in the following answers. How many shares of common stock are outstanding? How many shares of preferred stock are outstanding? What is the preferred dividend as a percent of par? % Additional Questions 1. After completing the Cash Dividends panel. answer the following question Does Pranks, Inc. have any treasury stock? How can you tell? 2. In which years has Pranks, Inc. paid cumulative preferred dividends in arrears? a. Year 1 b. Year 2 c. Year 3 d. Year 4 e. Year 5 . Year 6 Stock Dividend The company declared a 24 common stock dividend on December 1, and would like you to compute the following pieces of missing Histondanfthanacha? Asal us 1. Aer conthe Cabedo the form Dok Inc. have any con 2. In which years has Pranksteen cumulative rende? .. Ver i Vear 2 Yea d. Year e. Var var Stock Dividend The company declared a common stock dividend on December 1 w would like you to the flowing con. The main of the camember and the actulbution date of the stock. December 31 rat in the main Wormation in the following the formation over and your work on the other parte delle stesse de terme kwa declared adding me were recorded at the end of the war Totald.in pral before the stock dividend Total retained warnings before the stock dividend Total stockholders eauty before the stock dividend Total adapta alter the stock duidend Total retained earnings after the stock dividend To stockholders equity atter the stock dividens

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