The following information is taken from the balance sheetand related disclosures of Maxwell, Inc.:Total paid-in capital . . . . . . . . . . . . . . . . . $5,400,000Outstanding shares:Common stock, $5 par value . . . . . . . . 100,000 shares6% preferred stock, $100 par value . . . 10,000 sharesPreferred dividends in arrears . . . . . . . . . 2 yearsTotal stockholders’ equity . . . . . . . . . . . . . $4,700,000 Which of the following statements is (are) true? (For this ques-tion, more than one answer may be correct.) a. The preferred dividends in arrears amount to $120,000and should appear as a liability in the corporate balancesheet.b. The book value per share of common stock is $35.c. The stockholders’ equity section of the balance sheetshould indicate a deficit (negative amount in retainedearnings) of $700,000.d. The company has paid no dividend on its common stockduring the past two years.
The following information is taken from the balance sheet
and related disclosures of Maxwell, Inc.:
Total paid-in capital . . . . . . . . . . . . . . . . . $5,400,000
Outstanding shares:
Common stock, $5 par value . . . . . . . . 100,000 shares
6%
Preferred dividends in arrears . . . . . . . . . 2 years
Total
Which of the following statements is (are) true? (For this ques-
tion, more than one answer may be correct.)
a. The preferred dividends in arrears amount to $120,000
and should appear as a liability in the corporate balance
sheet.
b. The book value per share of common stock is $35.
c. The stockholders’ equity section of the balance sheet
should indicate a deficit (negative amount in retained
earnings) of $700,000.
d. The company has paid no dividend on its common stock
during the past two years.
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