Description
the following questions in 1,050 words using the Lachlin Corporation Balance Sheet located on p. 575 of Financial Accounting:
- 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, what would be the balance reported for retained earnings?
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Explanation & Answer
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Name
Section
Date
Exercises 11-4
E11-4
Lachlin Corporation
Balance Sheet
(a)
less:
(b)
(c)
(d)
(e)
Issued shares
Shares issued and authorized
Outstanding common stock
Value of shares issued
Shares issued
Stated value of common stock
Preferred stock( 10000-6000)
Value of shares issued and authorized
Par vlalue of preferred stock
Annual dividend on preferred stock
Preferred stock( 10000-6000)
Dividend rate on preferred stock
Retained earnings
Dividends
Retained earnings balance
580000
-6000
574000
$2,900,000
580000
$5
4000
$600,000
$150
$36,000
4000
9%
$1,158,000
$72,000
$1,086,000
627
ercises 11-4
627
Surname [1]
Student’s Name
Professor’s Name
Accounting
5 April 2017
Examining the Statement of Stockholders’ Equity.
The statement of stockholders’ equity is a critical tool used to determine the
changes on the retained earnings and capital. Among the users of statement of stockholders’
statement include; investors, managers, and accountants. Basically, the statement provides the
user with a clear outline on the financing aspect of the firm or business or corporation or
company (Porter & Norton, 2012). This paper attempts to explore the various metrics used in
examining the stockholders’ equity statement, more so, from the balance sheet of Lachlin
Corporation.
Among the relevant metrics in our study include the outstanding shares, retained
earnings, dividends, and dividend rate. From the balance sheet, the stockholders’ equity is
classified i...