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The following information applies to the questions displayed below. current balance sheet shows the following stockholders’ equity section: Preferred stock-5% cumulative, $–par value, 1,000 shares authorized, issued, and outstanding Common stock-$_ par value, 4,000 shares authorized, issued, and outstanding Retained earnings $55,000 160,000 320,000 Total stockholders’ equity $535,000
Expert Answer
| 6.1) Par value of preferred stock per share = $55000/1000 = | $ 55.00 |
| Preferred dividends payable per year = 1000*55*5% = | $ 2,750 |
| Total dividends in arrears = 2750*2= | $ 5,500 |
| Current year dividend | $ 2,750 |
| Total amount paid to the preferred shareholders | $ 8,250 |
| Total amount paid to the common shareholders (14250-8250) | $ 6,000 |
| 6.2) | |
| Amount of dividends per share of common stock = 6000/4000 = | $ 1.50 |
