6 The stockholders' equity section of Thompson Corporation's balance sheet at December 31 is presented here. THOMPSON CORPORATIONBalance Sheet (partial)Stockholders' equity Paid-in capital Preferred stock, cumulative, 10,000 shares authorized, 6,000 shares issued and outstanding$600,000 Common stock, no par, 750,000 shares authorized, 570,000 shares issued2,900,000 Total paid-in capital3,500,000 Retained earnings1,158,000 Total paid-in capital and retained earnings4,658,000 Less: Treasury stock (6,000 common shares)32,000Total stockholders' equity$4,626,000 InstructionsFrom a review of the stockholders' equity section, answer the following questions.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 $42,000, what is the dividend rate on preferred stock? If dividends of $84,000 were in arrears on preferred stock, what would be the balance reported for retained earnings? .

Number of common shares outstanding = Number of common shares issued - Number of treasury shares =…

Answered: How many shares of common stock are…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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6 The stockholders' equity section of Thompson Corporation's balance sheet at December 31 is presented here.

THOMPSON CORPORATION Balance Sheet (partial)
Stockholders' equity
Paid-in capital
Preferred stock, cumulative, 10,000 shares authorized, 6,000 shares issued and outstanding	$600,000
Common stock, no par, 750,000 shares authorized, 570,000 shares issued	2,900,000
Total paid-in capital	3,500,000
Retained earnings	1,158,000
Total paid-in capital and retained earnings	4,658,000
Less: Treasury stock (6,000 common shares)	32,000
Total stockholders' equity	$4,626,000

Instructions

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

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 $42,000, what is the dividend rate on preferred stock?

If dividends of $84,000 were in arrears on preferred stock, what would be the balance reported for retained earnings?

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