A portion of the stockholders\' equity section from the balance sheet of Walland

Question

A portion of the stockholders' equity section from the balance sheet of Walland Corporation appears as follows:

Assume that all the stock was issued on January 1 and that no dividends were paid during the first two years of operation. During the third year, Walland Corporation paid total cash dividends of $736,000.

What was the average issue price of each type of preferred stock? (Omit the "$" sign in your response.)

A portion of the stockholders' equity section from the balance sheet of Walland Corporation appears as follows:

Explanation / Answer

cumulative dividend for 3 years=2000000*9%*3=540000

non cumulative dividend=800000*12%=96000

common stock dividend=736000-540000-96000=100000

cumulative issue price=$50

non cumulative issue price=$100

cumulative prefered price at 3 year end=2000000+540000/40000=63.5

non cumulative price at end=800000+96000/8000=112

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