Leyland Corporation’s balance sheet at December 31 Stockholders’ equity Paid-in

Question

Leyland Corporation’s balance sheet at December 31 Stockholders’ equity Paid-in capital Preferred stock, cumulative, 9,167 shares authorized, 5,500 shares issued and outstanding 566,500 Common stock, no par, 723,750 shares authorized, 559,700 shares issued 2,238,800 Total paid-in capital 2,805,300 Retained earnings 1,201,200 Total paid-in capital and retained earnings 4,006,500 Less: Treasury stock (5,770 common shares) (30,773 Total stockholders’ equity $3,975,727 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 $45,320, what is the dividend rate on preferred stock? e) If dividends of $71,300 were in arrears on preferred stock, what would be the balance reported for retained earnings?

Explanation / Answer

Question a. Quantity Rate Amount Common Stock no per 559700 4.00 2238800 Less: Treasury Stock 5770 4.00 23080 Common Stock outstanding 553930 4.00 2215720 Answer: 553,930 common stock. Question b. Stated Value of comon stock is $4. Question c. Per value of preferred stock = 566500/5500= $103.00 Question d. Dividend rate = 45320/566500 = 8% Question e. Retained Earnings    1,201,200.00 Add: Arear Dividend on pref shares          71,300.00 Reported retained earnings    1,272,500.00 answer: 1,272,500

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