Soltech Company’s balance sheet shows the following stockholders’ equity section. Preferred stock—8% cumulative, $___ par value, 1,500 shares authorized, issued, and outstanding $ 375,000 Common stock—$___ par value, 18,000 shares authorized, issued, and outstanding . 900,000 Retained earnings 1,125,000 Total stockholders’ equity . $2,400,000 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 $100,000, what total amount will be paid to the preferred and to the common shareholders?
Soltech Company’s
Common stock—$___ par value, 18,000 shares authorized, issued, and outstanding . 900,000
Total stockholders’ equity . $2,400,000 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 $100,000, what total amount will be paid to the preferred and to the common
shareholders?
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