2020 90,000 PROBLEM #2. The following accounts and their balances appear in the

Question

2020 90,000 PROBLEM #2. The following accounts and their balances appear in the ledger of Motor Toys, Inc. on December 31, 2016. Preferred 2% Stock, $50 Par, 20,000 shares authorized Paid-In Capital in Excess of Par-Preferred Stock Common Stock, $3 Par, 400,000 shares authorized Paid-In Capital in Excess of Par- Common Stock Retained Earnings 600,000 80,000 900,000 375,000 5,150,000 1. How many shares of preferred stock have been issued? 2. How many shares of common stock have been issued? 3. What is the total dollar amount of Stockholders' Equity? 4. What amount is needed to pay the preferred stock annual dividend?

Explanation / Answer

1) Preferred shares issued = 600000/50 = 12000 shares

2) Common shares issued = 900000/3 = 300000 Shares

3) Total dollar amount of stockholder's equity :

Dollar amount of stockholder's equity = 7105000

d) Preferred dividend = 600000*2% = 12000

Preferred stock 600000 Paid in capital in excess of par value-preferred 80000 Common stock 900000 Paid in capital in excess of par value-common 375000 Total paid in capital 1955000 Retained earnings 5150000 Total stockholder's equity 7105000

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