CALCULATOR FULL SCREEN PRINTER VERSION BACK NEXT Exercise 11-4 The stockholders\

Question

CALCULATOR FULL SCREEN PRINTER VERSION BACK NEXT Exercise 11-4 The stockholders' equity section of Lachlin Corporation's balance sheet at December 31 is presented here. LACHLIN CORPORATION Balance Sheet (partial) Stockholders' equity Paid-in capital Common stock, no par, 750,000 shares authorized, 580,000 shares issued Total paid-in capital Retained earnings Preferred stock, cumulative, 10,000 shares authorized, 6,000 shares issued and outstanding 600,000 2,900,000 3,500,000 1,158,000 4,658,000 udy Total paid-in capital and retained earnings 32,000 $4,626,000 Less: Treasury stock (6,000 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 version 4.24.6.2 (c) What is the par value of the preferred stock? 05 PM I Pmcacy-Polc¥ 1?·2000-2018John.wilera.sons.inc. All Rights Reserved. A Division of

Explanation / Answer

a) Common Stock outstanding = 580000-6000 = 574000 shares

b) Stated value per share of common stock = 2900000/580000 = 5 per share

c) Par value per share of preferred Stock = 600000/600 = 100 per share

d) Dividend rate = 36000*100/600000 = 6%

e) The retained earning balance = 1158000-72000 = 1086000

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