Chapter 13, Problem 13.48BP

a)

To determine

Preferred stock: The stock that provides a fixed amount of return (dividend) to its stockholder before paying dividends to common stockholders is referred as preferred stock.

Common stock: These are the ordinary shares that a corporation issues to the investors in order to raise funds. In return, the investors receives a share of profit from the profits earned by the corporation.

Cash dividends: The amount of cash provided by a corporation out of its distributable profits to its shareholders as a return for the amount invested by them is referred as cash dividends.

To record: the stock issuance and cash dividends transactions for Company W.

2.

To determine

To Prepare: the stockholders’ equity section of Company W’s balance sheet at October 31, 2016.