Stockholders Equity Section of the Balance Sheet

Purpose of Assignment

The purpose of this assignment is to help you become familiar with examining the stockholders’ equity section of the balance sheet.

Assignment Steps

Resources: Financial Accounting: Tools for Business Decision Making, Ch. 11

In 200 words, answer questions a) through e) below using this partial Balance Sheet:

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, 580,000 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

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 $36,000, what is the dividend rate on preferred stock?
e) If dividends of $72,000 were in arrears on preferred stock, what would be the balance reported for retained earnings?

Use the Week 4 Excel^® spreadsheet and submit with your answers.

Ensure you type the provided answers in the section that says type here. Ensure you break the answers down per question and is easily known.

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