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Purpose of Assignment
The purpose of this assignment is to help you become familiar with examining the stockholders’ equity section of the balance sheet.
Resources: Financial Accounting: Tools for Business Decision Making, Ch. 11
Answer the following questions in 400 words using the Lachlin Corporation Balance Sheet provided on the attached Word Document.
- 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 $36,000, what is the dividend rate on preferred stock?
- If dividends of $72,000 were in arrears on preferred stock, and the company declared dividends of $200,000 what amount would be the dividends paid to preferred stockholders and what amount would be paid to common stockholders? Explain “in arrears” and how this impacts the payment of dividends on preferred and common stock.
Use the Week 4 Excel® spreadsheet and submit with your answers. Use excel formulas to calculate results.
Click the Assignment Files tab to submit your assignment.