The stockholders\' equity section of Leyland Corporation\'s balance sheet at Dec
ID: 2457310 • Letter: T
Question
The stockholders' equity section of Leyland Corporation's balance sheet at December 31 is presented here.
LEYLAND CORPORATION
Balance Sheet (partial)
Paid-in capital
Preferred stock, cumulative, 10,000 shares authorized, 6,000 shares issued and outstanding
Common stock, no par, 750,000 shares authorized, 580,000 shares issued
2,900,000
Total paid-in capital
Retained earnings
1,158,000
Total paid-in capital and retained earnings
Less: Treasury stock (6,000 common shares)
32,000
$4,626,000
Instructions
From a review of the stockholders' equity section, answer the following questions.
How many shares of common stock are outstanding?
Assuming there is a stated value, what is the stated value of the common stock?
What is the par value of the preferred stock?
If the annual dividend on preferred stock is $36,000, what is the dividend rate on preferred stock?
If dividends of $72,000 were in arrears on preferred stock, what would be the balance reported for retained earnings?
LEYLAND CORPORATION
Balance Sheet (partial)
Stockholders' equityPaid-in capital
Preferred stock, cumulative, 10,000 shares authorized, 6,000 shares issued and outstanding
$600,000Common stock, no par, 750,000 shares authorized, 580,000 shares issued
2,900,000
Total paid-in capital
3,500,000Retained earnings
1,158,000
Total paid-in capital and retained earnings
4,658,000Less: Treasury stock (6,000 common shares)
32,000
Total stockholders' equity$4,626,000
Explanation / Answer
a)
b)
Value per Share = (29,00,000/5,80,000) = $5
Value of Total Authorised Share Capital = (750000*5) = 3750000$
c)
Par Value of Prefrence Shares = (600000/6000) = 100$
d)
Dividend Paid = 36000$
Value of Preferred Stock = 600000$
%age Dividend Rate = (36000/600000) = 6%
e)
Present retained earnings = 1158000
Less : Arrears for Dividend paid = 72000
Balance Retained earnings = 1086000
Authorised Capital 750000 Less: Issued and Paid up 580000 Outstanding Shares to be issued 170000Related Questions
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