Chapter 11, Problem 1BP

a.

To determine

Prepare the stockholders’ equity section of the balance sheet at December 31, 2015.

b.

To determine

Identify whether there are any dividends in arrears on the company’s preferred stock at December 31, 2015.

c.

To determine

Identify whether the market price of the preferred stock expected to be higher or lower than its call price of $110 at December 21, 2015, if the interest rates are steadily increase from 2012 through 2015.