Stockholders Equity transactions
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The stockholders' equity section of Linton Corporation at December 31 is as follows.
LINTON CORPORATION
Balance Sheet (partial)
Paid-in capital
Preferred stock, cumulative, 10,000 shares authorized,
5,000 shares issued and outstanding $ 300,000
Common Stock, no par, 750,000 shares authorized, 300,000 shares issued 1,500,000
Total paid-in capital 1,800,000
Retained earnings 2,050,000
Total paid-in capital and retained earnings 3,850,000
Less: Treasury stock (5,000 common shares) (64,000)
Total stockholders' equity $3,786,000
(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 $18,000, what is the dividend rate on preferred stock?
(e) If dividends of $36,000 were in arrears on preferred stock, what would be the balance in Retained Earnings?
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The solution explains some questions relating to stockholders equity transactions
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(a) How many shares of common stock are outstanding?
Outstanding shares = Shares issued - treasury stock
= 300,000 - 5,000 = 295,000 shares
(b) Assuming there is a stated value, what is the stated value of the common stock?
Stated value ...
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