The stockholders’ equity section of Jarvis Corporation at December 31 is as follows.
|
JARVIS CORPORATION |
|
|
Paid in capital |
|
|
Preferred stock, cumulative, 10,000 shares authorized, 6,000 shares issued |
|
|
and outstanding |
$ 300,000 |
|
Common stock, no par, 750,000 shares authorized, 600,000 shares issued |
1,200,000 |
|
Total paid in capital |
1,500,000 |
|
Retained earnings |
1,858,000 |
|
Total paid in capital and retained earnings |
3,358,000 |
|
Less: Treasury stock (10,000 common shares) |
(64,000) |
|
Total stockholders’ equity |
$3,294,000 |
Instructions
From a review of the stockholders’ equity section, as chief accountant, write a memo to the president of the company answering 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 $30,000, what is the dividend rate on preferred stock?
(e) If dividends of $60,000 were in arrears on preferred stock, what would be the balance in Retained Earnings?