Raphael Corporation’s balance sheet shows the following stockholders’ equity section. Preferred stock—5% cumulative, $___ par value, 1,000 shares authorized, issued, and outstanding $ 50,000 Common stock—$___ par value, 4,000 shares authorized, issued, and outstanding . 80,000 Retained earnings 150,000 Total stockholders’ equity . $280,000 Required 1. What are the par values of the corporation’s preferred stock and its common stock? 2. If no dividends are in arrears at the current date, what is the book value per share of common stock? Round per share value to the nearest cent. 3. If two years’ preferred dividends are in arrears at the current date, what is the book value per share of common stock? Round per share value to the nearest cent. 4. If two years’ preferred dividends are in arrears at the current date and the board of directors declares cash dividends of $11,500, what total amount will be paid to the preferred and to the common shareholders?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Raphael Corporation’s balance sheet shows the following stockholders’ equity section. Preferred stock—5% cumulative, $___ par value, 1,000 shares authorized, issued, and outstanding $ 50,000
Common stock—$___ par value, 4,000 shares authorized, issued, and outstanding . 80,000
Retained earnings 150,000
Total stockholders’ equity . $280,000 Required
1. What are the par values of the corporation’s preferred stock and its common stock?
2. If no dividends are in arrears at the current date, what is the book value per share of common stock?
Round per share value to the nearest cent.
3. If two years’ preferred dividends are in arrears at the current date, what is the book value per share of
common stock? Round per share value to the nearest cent.
4. If two years’ preferred dividends are in arrears at the current date and the board of directors declares cash
dividends of $11,500, what total amount will be paid to the preferred and to the common shareholders?

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