Purpose of Assignment

The purpose of this assignment is to help you become familiar with examining the stockholders' equity section of the balance sheet.

Assignment Steps

Resources:Financial Accounting: Tools for Business Decision Making,Ch. 11

Answerquestions a) through e) below using this partial Balance Sheet:

:

Stockholders' equity

Paid-in capital

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

$ 600,000

Common stock, no par, 750,000 shares authorized, 580,000 shares issued

2,900,000

Total paid-in capital

3,500,000

Retained earnings

1,158,000

Total paid-in capital and retained earnings

4,658,000

Less: Treasury stock (6,000 common shares)

32,000

Total stockholders' equity

4,626,000

• a)How many shares of common stock are outstanding?
• b)Assuming there is a stated value, what is the stated value of the common stock?
• 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)If dividends of $72,000 were in arrears on preferred stock, what would be the balance reported for retained earnings?

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