Description
Purpose of Assignment
The purpose of this assignment is to help you become familiar with examining the stockholders' equity section of the balance sheet.
Assignment Steps
Resources: Financial Accounting: Tools for Business Decision Making, Ch. 11
Answer the following questions in 400 words using the Lachlin Corporation Balance Sheet provided on the attached Word Document.
- How many shares of common stock are outstanding?
- Assuming there is a stated value, what is the stated value of the common stock?
- What is the par value of the preferred stock?
- If the annual dividend on preferred stock is $36,000, what is the dividend rate on preferred stock?
- If dividends of $72,000 were in arrears on preferred stock, and the company declared dividends of $200,000 what amount would be the dividends paid to preferred stockholders and what amount would be paid to common stockholders? Explain "in arrears" and how this impacts the payment of dividends on preferred and common stock.
Use the Week 4 Excel® spreadsheet and submit with your answers. Use excel formulas to calculate results.
Click the Assignment Files tab to submit your assignment.
Unformatted Attachment Preview
Purchase answer to see full attachment
Explanation & Answer
Good luck in your study and if you need any further help in your assignments, please let me know.Goodbye.
Surname 1
Surname
Professor Name
Course Name
Date
Part a: Total number of shares of common stock which were outstanding
For our case, the number of outstanding common stock will be calculated using the
following formula: Outstanding common stock=Total common stock shares issued – Total
Treasury stock of the organization. In this case, Lachlin Corporation common stock issued as
indicated on the balance sheet was $580,000 while its treasury stock remained at $6,000. The
number of common shares will be given as; $580,000-$6000= 574,000. This value was ve...