The stockholders’ equity section of Ayayai Corp.’s balance sheet at December 31
ID: 2578984 • Letter: T
Question
The stockholders’ equity section of Ayayai Corp.’s balance sheet at December 31 is presented here.
$ 510,000
1,650,000
2,160,000
1,148,000
3,308,000
26,667
$3,281,333
From a review of the stockholders’ equity section, answer the following questions.
(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 $30,600, what is the dividend rate on preferred stock?
(e) If dividends of $71,000 were in arrears on preferred stock, what would be the balance reported for retained earnings?
1,077,000
I can't get the retained earnings balance correct i have put in 1,077,000 and 1,219,000 HELP!
AYAYAI CORP.Balance Sheet (partial) Stockholders’ equity Paid-in capital Preferred stock, cumulative, 8,500 shares authorized, 5,100 shares issued and outstanding
$ 510,000
Common stock, no par, 711,207 shares authorized, 550,000 shares issued1,650,000
Total paid-in capital2,160,000
Retained earnings1,148,000
Total paid-in capital and retained earnings3,308,000
Less: Treasury stock (5,000 common shares)26,667
Total stockholders’ equity$3,281,333
Explanation / Answer
Answer =a) How many Common Stocks are outstanding = Total Shares issied - Trreasury Stock Total Stocks are outstanding = Total Shares issied - Treasury Stock Total Stocks are outstanding = 550,000 shares - 5,000 shares Total Stocks are outstanding = 545,000 shares Answer = B) Assuming there is a stated value, what is the stated value of the common stock Stated Value of the common stock = Total Value of the common stock / Number of shares Stated Value of the common stock = $ 1,650,000 / 550,000 shares Stated Value of the common stock = 3 Per shares Answer = c) What is the par value of the preferred stock Par Value of the preferred Stock = $ 510,000 / 5100 Shares = $ 100 Per Shares Answer = D) If the annual dividend on preferred stock is $30,600, what is the dividend rate on preferred stock Dividend Rate = $ 30,600 / 510,000 =0.6 or 6% Answer = E) If dividends of $71,000 were in arrears on preferred stock, what would be the balance reported for retained earnings Preferred stock is in arrears, This will no i Balance in Retained Earning = 11,48,000.00 Less : Dividend Arrears 71,000.00 Less: Excess of paid in capital in treasury Stock 11,667.00 ($ 26,667 - $ 15,000 (5000 Common Shares X 3 Per Shares) Retained Earnings = 10,65,333.00
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