Question

 Stockholder's Equity

 General Corporation's ledger includes the following account balances at December 31, 2005:

 Common Stock, S1 par value, 100,000 shares issued 100,000

 Add"l Paid-in Capital in Excess of Par Value, Common 800,000

 Preferred Stock, 10%, S60 par value, 10,000 shares issued 600,000

 Add'l Paid-in Capital in Excess of Par Value, Preferred 300,000

 Retained Earnings 500,000

 Treasury Stock, Common, 1,000 shares 100,000

 1. The balance sheet prepared at December 31, 2005, would report total legal capital of:

 2. The balance sheet prepared at December 31, 2005, would report total capital of:

 3. The balance sheet prepared at December 31, 2005, would report total stockholders' equity of:

 4. The number of common shares outstanding at December 31, 2005 would be: 5. Assuming the Preferred Stock is "Cumulative", the preferred shareholders would be entitled to receive total annual dividends of:

Answer 1

1. Total legal capital = Par value of common stock + Par value of preferred stock

= 100,000 + 600,000

= $700,000

2. Total capital = Common stock, par value + Additional paid in capital, in excess of par, common + Preferred stock, par value + Additional paid in capital, in excess of par, preferred

= 100,000 + 800,000 + 600,000 + 300,000

= $1,800,000

3. Total stockholders' equity = Common stock, par value + Additional paid in capital, in excess of par, common + Preferred stock, par value + Additional paid in capital, in excess of par, preferred + Retained earnings - Treasury stock

= 100,000 + 800,000 + 600,000 + 300,000 + 500,000 - 100,000

= $2,200,000

4. Number of common shares outstanding = Number of common shares issued - Number of treasury shares

= 100,000 - 1,000

= 99,000

5. Annual dividend on preferred stock = Dividend per share x Number of shares issued

= (60 x 10%) x 10,000

= $60,000