Question

In: Accounting

The stockholders’ equity section of Sarasota Corp.’s balance sheet at December 31 is presented here. SARASOTA...

The stockholders’ equity section of Sarasota Corp.’s balance sheet at December 31 is presented here.

SARASOTA CORP. Balance Sheet (partial)
Stockholders’ equity
Paid-in capital
Preferred stock, cumulative, 10,900 shares authorized, 6,500 shares issued and outstanding		$ 663,000
Common stock, no par, 734,000 shares authorized, 564,000 shares issued		1,692,000
Total paid-in capital		2,355,000
Retained earnings		1,180,000
Total paid-in capital and retained earnings		3,535,000
Less: Treasury stock (7,800 common shares)		41,600
Total stockholders’ equity		$3,493,400

From a review of the stockholders’ equity section, answer the following questions.

(a) How many shares of common stock are outstanding?

Common stock outstanding

shares

(b) Assuming there is a stated value, what is the stated value of the common stock?

The stated value of the common stock

$ per share

(c) What is the par value of the preferred stock?

The par value of the preferred stock

$ per share

(d) If the annual dividend on preferred stock is $53,040, what is the dividend rate on preferred stock?

The dividend rate

%

(e) If dividends of $72,300 were in arrears on preferred stock, what would be the balance reported for retained earnings?

The Retained Earnings balance

$

Expert Solution

Answer a) shares of common stock outstanding = Issued common stock - treasury stock = 564,000 - 7800 = 556,200 shares b) Stated value of common stock = value of common stock / issued common stock = $ 1,692,000 / 564,000 =$3 c) Par value of preferred stock = value of preferred stock/ issued preferred stock = $ 663,000 / 6,500 = $ 102 d) Dividend rate on preferred stock = dividend on preferred stock/ outstanding preferred stock = $ 53,040 / $ 663,000 = 8% e) Retained eranings balance If dividends were in arrears on preferred stock, it will not affect the balance of retained earnings. Hence, it remains same. Therefore, Retained earnings = $ 1,180,000

ekkarill92 answered 1 year ago

Sarasota Corp.’s balance sheet at December 31, 2021, is presented below. SARASOTA CORP. Balance Sheet December...

Sarasota Corp.’s balance sheet at December 31, 2021, is presented below. SARASOTA CORP. Balance Sheet December 31, 2021 Cash $49,200 Accounts payable $51,200 Accounts receivable 91,000 Common stock ($10 par) 160,000 Allowance for doubtful accounts (3,000 ) Retained earnings 254,800 Supplies 8,800 Land 80,000 Buildings 284,000 Accumulated depreciation—buildings (44,000 ) $466,000 $466,000 During 2022, the following transactions occurred. 1. On January 1, Sarasota issued 2,400 shares of $40 par, 7% preferred stock for $98,400. 2. On January 1, Sarasota also...

Exercise 11-07 The stockholders’ equity section of Bramble Corp.’s balance sheet at December 31 is presented...

Exercise 11-07 The stockholders’ equity section of Bramble Corp.’s balance sheet at December 31 is presented here. BRAMBLE CORP. Balance Sheet (partial) Stockholders’ equity Paid-in capital Preferred stock, cumulative, 12,500 shares authorized, 7,500 shares issued and outstanding $ 787,500 Common stock, no par, 735,000 shares authorized, 565,000 shares issued 2,260,000 Total paid-in capital 3,047,500 Retained earnings 1,158,000 Total paid-in capital and retained earnings 4,205,500 Less: Treasury stock (6,900 common shares) 36,800 Total stockholders’ equity $4,168,700 From a review of the...

Exercise 11-4 The stockholders’ equity section of Whispering Winds Corp.’s balance sheet at December 31 is...

Exercise 11-4 The stockholders’ equity section of Whispering Winds Corp.’s balance sheet at December 31 is presented here. WHISPERING WINDS CORP. Balance Sheet (partial) Stockholders’ equity Paid-in capital Preferred stock, cumulative, 11,167 shares authorized, 6,700 shares issued and outstanding $ 683,400 Common stock, no par, 735,776 shares authorized, 569,000 shares issued 1,707,000 Total paid-in capital 2,390,400 Retained earnings 1,155,000 Total paid-in capital and retained earnings 3,545,400 Less: Treasury stock (6,100 common shares) 32,533 Total stockholders’ equity $3,512,867 From a review...

The stockholders' equity section of Marigold Corp. balance sheet at December 31, 2019, appears below: Stockholders'...

The stockholders' equity section of Marigold Corp. balance sheet at December 31, 2019, appears below: Stockholders' equity Paid-in capital Common stock, $10 par value, 490,000 shares authorized; 320,000 issued and outstanding $3,200,000 Paid-in capital in excess of par 1,300,000 Total paid-in capital 4,500,000 Retained earnings 870,000 Total stockholders' equity $5,370,000 During 2020, the following stock transactions occurred: Jan. 18 Issued 88,000 shares of common stock at $22 per share. Aug. 20 Purchased 29,000 shares of Marigold Corp. common stock at...

Analysis of Stockholders' Equity The Stockholders' Equity section of the December 31, 2017, balance sheet of...

Analysis of Stockholders' Equity The Stockholders' Equity section of the December 31, 2017, balance sheet of Eldon Company appeared as follows: Preferred stock, $40 par value, 5,000 shares authorized, ? shares issued $200,000 Common stock, ? par, 10,000 shares authorized, 10,000 shares issued 100,000 Additional paid-in capital—Preferred 9,000 Additional paid-in capital—Common 800,000 Additional paid-in capital—Treasury stock 2,000 Total contributed capital $1,111,000 Retained earnings 39,000 Treasury stock, preferred, 100 shares (3,300) Total stockholders’ equity $ ? Required: Determine the following items...

Problem#4 The stockholders equity section of Carey Co.'s balance sheet at December 31, 2014, was as...

Problem#4 The stockholders equity section of Carey Co.'s balance sheet at December 31, 2014, was as follows: Common stock--$10 par (authorized 1,000,000 shares, issued and outstanding 600,000 shares) $6,000,000 Paid-in capital in excess of par $1,500,000 Retained earnings $3,250,000 Total $10,750,000 Instructions: Prepare journal entries (1, 2 and 4) and show proper disclosure (3) (stockholders equity section of b/s) to reflect the following treasury stock transactions showing how each is accounted for under the...

The stockholders' equity section of Pats Corporation's balance sheet as of December 31, 2019 is as...

The stockholders' equity section of Pats Corporation's balance sheet as of December 31, 2019 is as follows: Stockholders' Equity Common stock, no par value; authorized, 20,000,000 shares; Issued and outstanding, 4,000,000 shares $32,000,000 Retained earnings 55,000,000 $87,000,000 The following events occurred during 2020: Jan. 15 45,000 shares of authorized and unissued common stock sold for $8 per share. Jan. 26 Declared a cash dividend of 12 cents per share, payable February 25 to stock-holders of record on February...

The stockholders' equity section of Benton Corporation's balance sheet as of December 31, 2018 is as...

The stockholders' equity section of Benton Corporation's balance sheet as of December 31, 2018 is as follows: Stockholders' Equity Common stock, $5 par value; authorized, 2,000,000 shares; issued, 400,000 shares $2,000,000 Paid-in capital in excess of par 850,000 Retained earnings 3,000,000 $5,850,000 The following events occurred from January to August during 2019: 1. Jan. 5 10,000 shares of authorized and unissued common stock were sold for $8 per share. 2. Jan. 16 Purchase back 1,000 treasury shares at $10 per...

The stockholders’ equity section of Velcro World is presented here. VELCRO WORLD Balance Sheet (partial) ($...

The stockholders’ equity section of Velcro World is presented here. VELCRO WORLD Balance Sheet (partial) ($ and shares in thousands) Stockholders' equity: Preferred stock, $1 par value $ 4,200 Common stock, $1 par value 12,000 Additional paid-in capital 262,200 Total paid-in capital 278,400 Retained earnings 270,000 Treasury stock, 10,000 common shares (140,000 ) Total stockholders' equity $ 408,400 Based on the stockholders' equity section of Velcro World, answer the following questions. Remember that all amounts are presented in thousands. Required:...

The stockholders’ equity section on the December 31, 2014, balance sheet of American Corporation follows: Stockholders’...

The stockholders’ equity section on the December 31, 2014, balance sheet of American Corporation follows: Stockholders’ Equity Contributed capital Preferred stock (par $21; authorized 17,000 shares, ? issued, of which 700 shares are held as treasury stock) $ 126,000 Common stock (no-par; authorized 24,000 shares, issued and outstanding 9,000 shares) 801,000 Contributed capital (includes $3,000 from treasury stock transactions) 15,000 Retained earnings 48,000 Cost of treasury stock, preferred (16,800 ) Required: 1. Calculate the number of shares of preferred stock...