Question
Pranks, Inc. is a manufacturer of joke and novelty products for perpetrators of practical jokes. The corporation has paid several cash dividends throughout 2016, and
Pranks, Inc. is a manufacturer of joke and novelty products for perpetrators of practical jokes. The corporation has paid several cash dividends throughout 2016, and is also declaring a stock dividend to its stockholders as the calendar year-end approaches. Youve been brought in as a consultant to assist with this process, and also to help determine whether some missing information can be calculated before the distribution of the stock dividend is made. The company has two classes of stock: common stock and cumulative preferred stock.
Youve been able to retrieve the following information so far:
Number of common shares authorized | 800,000 |
Number of common shares issued | 650,000 |
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 | $0 |
Total retained earnings before the stock dividend is declared | $33,500,000 |
Total Cash | Preferred Dividends | Common Dividends | |||
---|---|---|---|---|---|
Year | Dividends | Total | Per Share | Total | Per Share |
2011 | 20,000 | 20,000 | 0.20 | 0 | 0.00 |
2012 | 36,000 | 36,000 | 0.36 | 0 | 0.00 |
2013 | 79,000 | 34,000 | 0.34 | 45,000 | 0.09 |
2014 | 105,000 | 30,000 | 0.30 | 75,000 | 0.15 |
2015 | 120,000 | 30,000 | 0.30 | 90,000 | 0.18 |
2016 | 180,000 | 30,000 | 0.30 | 150,000 | 0.30 |
QUESTION:
The accounting manager for the company prepared the schedule of cash dividends paid over the period 2011-2016 on the Pranks, Inc. panel. However, one of the reasons for Pranks, Inc.s missing information is that the manager is away on vacation and is unreachable by phone, because he is backpacking on a remote island that does not have cell phone reception. Management would like you to determine some information from the data youve collected regarding its outstanding stock.
Fill in the answers below.
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? |
Does Pranks, Inc. have any treasury stock? How can you tell?
No, because the preferred stock cash dividend is always greater than zero.
Yes, because the number of shares authorized is greater than the number of shares issued.
No, because the common stock cash dividend is not always zero.
Yes, because the number of shares issued is greater than the number of shares outstanding.
2. For which years has Pranks, Inc. paid cumulative preferred dividends in arrears? Check all that apply.
2011
2012
2013
2014
2015
2016
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started