FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question

6  The stockholders' equity section of Thompson Corporation's balance sheet at December 31 is presented here.

 

THOMPSON CORPORATION
Balance Sheet (partial)

Stockholders' equity

 

  Paid-in capital

 

    Preferred stock, cumulative, 10,000 shares authorized, 6,000 shares issued and outstanding

$600,000

    Common stock, no par, 750,000 shares authorized, 570,000 shares issued

2,900,000

      Total paid-in capital

3,500,000

  Retained earnings

1,158,000

  Total paid-in capital and retained earnings

4,658,000

  Less: Treasury stock (6,000 common shares)

32,000

Total stockholders' equity

$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 $42,000, what is the dividend rate on preferred stock?

 

  • If dividends of $84,000 were in arrears on preferred stock, what would be the balance reported for retained earnings?

 

 

.

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