The stockholders\' equity section of Haley Corporation at December 31 is as foll

Question

The stockholders' equity section of Haley Corporation at December 31 is as follows. From a review of the stockholders' equity section, as chief accountant, write a memo to the president of the company answering 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 $20,000, what is the dividend rate on preferred stock? If dividends of $40,000 were in arrears on preferred stock, what would be the balance in Retained Earnings?

Explanation / Answer

Sol:

                                                                                                                              (Amount in $ )

= 790000 -580000

= 210000 shares

No. of shares issued

= 1160000 / 580000

= 2

No. of shares issued

                                                       

= 250000 / 5000

= 5

(div is declared on issued capital)

= 5000/ 20000

= .25 or 25 %

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