Dan Lutz owns and operates an interior design studio called Lutz Design Studio. The following amounts summarize the financial position of his business on April 30, 19X5:
Assets =Liabilities + Owner's Equity
2,240 (Accounts Receivable)
5,400 (Accounts payable)
22,660 (Dan Lutz Capital)
Lutz received $12,000 as a gift and deposited the cash in the business bank account.
Paid off the beginning balance of accounts payable.
Performed services for a client and received cash cash of $1,100.
Collected cash from a customer on account, $750.
Purchased supplies on account, $720.
Consulted on the interior design of a major office building and billed the client for services rendered, $5,000.
Invested personal cash of $1,700 in the business.
Recorded the following business expenses for the month:
Paid office rent - $1200
Paid advertising - $660
Sold supplies to another interior designer for $80 cash, which was the cost of the supplies.
Withdrew cash of $1400 for personal use.
Prepare the income statement of Lutz Design Studio for the month ended May 31, 19X5. List expenses in decreasing order by amount.
Prepare the statement of owner's equity of Lutz Design Studio for the month ended May 31, 19X5.
Prepare the balance sheet of Lutz Design Studio at May 31, 19X5.
-Participating preferred stock
Union Shipping Company has outstanding an issue of 3,000 shares of participating preferred stock that has a $100 par value and an 8 percent annual dividend. The preferred stockholders participate fully (on an equal per-share basis) with common stockholders in annual dividends of more than $9 per share for common stock. The firm has 5,000 shares of common stock outstanding.
1. If Union Shipping Company pays preferred stockholders their dividends and then declares an additional $100,000 in dividends, what is the total dividend per share for preferred and common stock?
2. If Union Shipping Company pays preferred stockholders their dividends and then declares an additional $40,000 in dividends, what is the total dividend per share for each type of stockholder?
3. If Union Shipping Company's preferred stock is cumulative and the past 2 years' dividends have been passed, what dividends will be received by each type of stockholder if the firm declares a total dividend of $30,000?
4. Rework #3 assuming that the total dividend payment is $20,000.
5. Rework #1 and #2 assuming that the preferred stock is non-particpating.
This problem involves the fundamentals of accounting