Stockholders equity

Preferred Stock, $100 par, 3.5%, 10,000 authorized $ 900,000

Common Stock, $0.25 par, 1,000,000 authorized 150,000

Paid in Capital in Excess of par C/S 20,850,000

Retained Earnings 80,000,000

Treasury stock at cost, 1,000 shares 45,000

Total Stockholders equity ??????????

1. What are the two methods companies use for stock repurchase? (2 points)

2. What method does this company use for repurchase of stock? (1 point)

3. How much per share did the company pay for the repurchased stock? (2 points)

4. Assume the preferred stock dividend is cumulative. Compute the total amount of preferred dividends the company is responsible for each year. (2 points)

5. Assume this is year four. The dividends have not been paid for the prior three years and the company elects to declare total dividends of $150,000 in year four. How much of this dividend will be paid to common shareholders? (3 points)

6. Using your answer in (i), what is the amount of dividends each common shareholder will receive? (2 points)

7. Assume the company used the OTHER method than what they used to record the repurchase of stock, prepare the stockholders equity section of the balance sheet. (5 points)