compute the amount payable to each class of stock. The stockholders” equity sections from three different corporations” balance sheets follow.
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1) Stockholders” equity: |
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Paid-in capital: |
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Preferred stock—7% cumulative, $240 par value,500 shares |
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authorized, issued, and outstanding |
$ 120,000 |
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Common stock—$48 par value, 10,000 shares authorized, |
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issued and outstanding |
480,000 |
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Total paid-in capital |
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Retained earnings |
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$ 600,000 |
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Total stockholders” equity |
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422,400 |
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(All dividends have been paid.) |
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$1,022,400 |
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2) Stockholders” equity: |
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Paid-in capital: |
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Preferred stock—6% cumulative, $80 par value,10,000 |
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shares authorized, issued, and outstanding |
$ 800,000 |
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Common stock—$240 par value, 30,000shares authorized, |
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issued and outstanding |
7,200,000 |
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Total paid-in capital |
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$8,000,000 |
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Retained earnings |
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88,000 |
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Total stockholders” equity |
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$8,088,000 |
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(The current year”s dividends have not been paid.) |
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3) Stockholders” equity: |
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Paid-in capital: |
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Preferred stock—7% cumulative, $480 par value,10,000 |
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shares authorized, issued, and outstanding |
$4,800,000 |
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Common stock—$240 par value, 50,000shares authorized, |
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issued and outstanding |
12,000,000 |
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Total paid-in capital |
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$16,800,000 |
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Retained earnings deficit |
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(1,872,000) |
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Total stockholders” equity |
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$14,928,000 |
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(Dividends have not been paid for 2 previous years or the current year.) |
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Compute the book values per share of the preferred and common stock of each corporation assuming that in a liquidation the preferred stock receives par value plus dividends in arrears.