Question
Use the following information for all questions related to Colchuck Company. Colchuck Company has the following information for Year 1 and Year 2. Year 1
Use the following information for all questions related to Colchuck Company. Colchuck Company has the following information for Year 1 and Year 2. Year 1 is Colchuck's first year in business. Year 1: Colchuck Company issues 2,000 shares of $1 par value common stock for $12 per share. Colchuck issues 100 shares of 10% cumulative preferred stock, which has a par value of $10. Colchuck received $11 per preferred share from investors. Colchuck earns income in its first year of operations of $10,000. Colchuck does not pay a dividend in Year 1. Year 2: Colchuck buys 200 shares of its own common stock from the market for $14 per share. Colchuck initiates a 2:1 common stock split on outstanding common shares. Colchuck earns income of $20,000 and declares, but does not pay, dividends of $12,000 to be divided among preferred and common shareholders.
Calculate retained earnings for Colchuck Company as of December 31st, Year 2, after all closing entries have been made.
What amount of cash dividends will preferred shareholders of Colchuck Company receive in Year 2?
Calculate Colchuck's total stockholder's equity at the end of Year 2.
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