PROBLEM 1 The New Fashions Company started operations on January 1, 2010. The company obtained a charter and was authorized to issue 3,000,000 shares of common stock with a par value of $2.50 and 500,000 shares of preferred stock 4% par value $8. The preferred stock is current, cumulative. The following transactions and information pertain to the 2013 fiscal year: 1. The company had the following ending balances for 2012: a. Retained Earnings: $450,000. b. Common Stock: $1,250,000 C. APIC: $9,750,000 d. Preferred Stock: $200,000 e. Preferred APIC: $175,000 2. Issued 50,000 shares of common stock when the stock was trading at $25.00 per share. 3. Issued 10,000 shares of preferred stock when the stock was trading at $32.00 per share. 4. Repurchased 10,000 of commons stock when the stock was trading at $15.00 per share. 5. Issued an additional 25,000 shares of common stock when the stock was trading at $20.00 per share. 6. Resold 5,000 shares of the treasury stock when the stock was trading at $25.00 per share. 7. The company declared a cash dividend of $25,000. 8. The company recorded net income for the year of $125,000. A. At the end of 2013, how many shares of preferred stock were outstanding? B. At the end of 2013, how many shares of common stock were outstanding? C. For the dividends declared in 2013 how much will be paid to preferred stock holders and how much will be paid to common stock holders? No dividends were paid prior to 2013. Amount paid to preferred stock holders: Amount paid to common stock holders