The stockholders\' equity section of Leyland Corporation\'s balance sheet at Dec

Question

The stockholders' equity section of Leyland Corporation's balance sheet at December 31 is presented here. 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 $46,200, what is the dividend rate on preferred stock? If dividends of $72,900 were in arrears on preferred stock, what would be the balance reported for retained earnings?

Explanation / Answer

a)common stock outstanding = 582600-6080=576,520

b)stated value = 2330400/582600= $4 per share

c)Par value of preferred stock = 660000/6600 =$ 100 per share

d)Dividend rate = 46200 / 660000 = .07 or 7%

e)Balance in RE = 1179200-46200 = 1133000

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