Exercise 11-4 The stockholders\' equity section of Pina Colada Corp.\'s balance

Question

Exercise 11-4 The stockholders' equity section of Pina Colada Corp.'s balance sheet at December 31 is presented here PINA COLADA CORP Balance Sheet (partial) Stockholders' equity Paid-in capital Preferred stock, cumulative, 10,333 shares authorized, 6,200 shares Issued and outstanding $620,000 1,722,000 2,342,000 1,175,000 3,517,000 42,133 $3,474,867 Common stock, no par, 742,241 shares authorized, 574,000 shares issued Total paid-in capital Retained eamings dy Total paid-in capital and retained earnings Less: Treasury stock (7,900 common shares) Total stockholders equity From a review of the stockholders' equity section, answer the following questions (a) How many shares of common stock are outstanding? Common stock outstanding (b) Assuming there is a stated value, what is the stated value of the common stock? The stated value of the common stock shares per share ?? 2 3 4 5

Explanation / Answer

a) Common stock outstanding = 574000-7900 = 566100 shares

b) Stated value per share = 1722000/574000 = 3 per share

c) Par value of preferred stock = 620000/6200 = 100 per share

d) Dividend rate = 37200*100/620000 = 6%

e) Balance of retained earnings = 1175000-71300 = 1103700

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