Stockholders' Equity

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agigka

Business Finance

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.



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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 below. • • • • • 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.
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Explanation & Answer

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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...


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