Several accounts and amounts from Favorite Franchise, Inc.s accounting records appear below:

Preferred stock, 7%, $40 par, 600 shares authorized,

cumulative, 300 shares issued $ 9,600

Common treasury stock, 200 shares at cost 16,000

Additional paid-in capital-preferred 12,800

Retained earnings 19,200

Common stock, $4 par value, authorized 4,000 shares 3,200

Additional paid-in capital common 36,800

The market price of the stock on December 31 was $20 per share. All the shares of common stock were issued on May 1, two years earlier.

Answer each of the following independent questions:

A.How much is considered contributed capital?

B.How much was each share of common stock initially sold for?

C.If Favorite Franchise did not pay dividends the first two years of operations, what effect would the cumulative feature have on year three when dividends are declared?

D.How many shares of common stock would be outstanding immediately after a 4-for-1 forward split?

E.How many shares of common stock will be outstanding immediately after the declaration of a 15% common stock dividend?

F.What impact will a 15% common stock dividend have on total stockholders equity?