Chapter 11, Problem 5BE

a)

To determine

Ascertain the amount of cash that was collected when the preferred stock was issued.

b)

To determine

Ascertain the amount of Company’s legal capital based on class B common stock.

c)

To determine

Based on class B common stock, ascertain the minimum amount of assets that must be retained in the Company as protection.

d)

To determine

Ascertain the number of shares of class B common stock that are available to sell as of December 31, Year 3.

e)

To determine

Ascertain the amount of the no-par common stock that would be outstanding immediately after the purchase of treasury stock.

f)

To determine

Whether it is possible to ascertain the market value of the preferred stock, based on the stockholders’ equity section. If yes, ascertain the market value of one share of this stock.