1) A company issued 70 shares of $100 par value common stock for $8,200 cash. Th

Question

1) A company issued 70 shares of $100 par value common stock for $8,200 cash. The total amount of paid-in capital in excess of par is:
2)Torino Company has 2,900 shares of $20 par value, 7.0% cumulative and nonparticipating preferred stock and 29,000 shares of $10 par value common stock outstanding. The company paid total cash dividends of $3,500 in its first year of operation. The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is: 1) A company issued 70 shares of $100 par value common stock for $8,200 cash. The total amount of paid-in capital in excess of par is:
2)Torino Company has 2,900 shares of $20 par value, 7.0% cumulative and nonparticipating preferred stock and 29,000 shares of $10 par value common stock outstanding. The company paid total cash dividends of $3,500 in its first year of operation. The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:
2)Torino Company has 2,900 shares of $20 par value, 7.0% cumulative and nonparticipating preferred stock and 29,000 shares of $10 par value common stock outstanding. The company paid total cash dividends of $3,500 in its first year of operation. The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:

Explanation / Answer

1 Total amount of paid-in capital in excess of par = 8200-(70*100) = $1200 2 Annual preferred dividends = 2900*20*7%= 4060 The cash dividend that must be paid to preferred stockholders in the second year = 4060+(4060-3500) = $4620

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