Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

The stockholders’ equity section of Ayayai Corp.’s balance sheet at December 31

ID: 2578984 • Letter: T

Question

The stockholders’ equity section of Ayayai Corp.’s balance sheet at December 31 is presented here.

$ 510,000

1,650,000

2,160,000

1,148,000

3,308,000

26,667

$3,281,333

From a review of the stockholders’ equity section, answer the following questions.

(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 $30,600, what is the dividend rate on preferred stock?


(e) If dividends of $71,000 were in arrears on preferred stock, what would be the balance reported for retained earnings?

1,077,000

I can't get the retained earnings balance correct i have put in 1,077,000 and 1,219,000 HELP!

AYAYAI CORP.
Balance Sheet (partial)
Stockholders’ equity    Paid-in capital       Preferred stock, cumulative, 8,500 shares authorized, 5,100 shares issued and outstanding

$ 510,000

      Common stock, no par, 711,207 shares authorized, 550,000 shares issued

1,650,000

   Total paid-in capital

2,160,000

   Retained earnings

1,148,000

        Total paid-in capital and retained earnings

3,308,000

   Less: Treasury stock (5,000 common shares)

26,667

Total stockholders’ equity

$3,281,333

Explanation / Answer

Answer =a) How many Common Stocks are outstanding = Total Shares issied - Trreasury Stock Total Stocks are outstanding = Total Shares issied - Treasury Stock Total Stocks are outstanding = 550,000 shares - 5,000 shares Total Stocks are outstanding = 545,000 shares Answer = B) Assuming there is a stated value, what is the stated value of the common stock Stated Value of the common stock = Total Value of the common stock / Number of shares Stated Value of the common stock = $ 1,650,000 / 550,000 shares Stated Value of the common stock = 3 Per shares Answer = c) What is the par value of the preferred stock Par Value of the preferred Stock = $ 510,000 / 5100 Shares = $ 100 Per Shares Answer = D) If the annual dividend on preferred stock is $30,600, what is the dividend rate on preferred stock Dividend Rate = $ 30,600 / 510,000 =0.6 or 6%   Answer = E)   If dividends of $71,000 were in arrears on preferred stock, what would be the balance reported for retained earnings Preferred stock is in arrears, This will no i Balance in Retained Earning =      11,48,000.00 Less : Dividend Arrears            71,000.00 Less: Excess of paid in capital in treasury Stock            11,667.00 ($ 26,667 - $ 15,000 (5000 Common Shares X 3 Per Shares) Retained Earnings =      10,65,333.00

Hire Me For All Your Tutoring Needs
Integrity-first tutoring: clear explanations, guidance, and feedback.
Drop an Email at
drjack9650@gmail.com
Chat Now And Get Quote