Answer the following questions in 1,050 words using the Lachlin Corporation Balance Sheet located on p. 575 of Financial Accounting:
- 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, what would be the balance reported for retained earnings?
Use the Week 4 Excel® spreadsheet and submit with your answers.
Answer questions about stockholders’ equity section.
(LO 2, 4), C
E11-4 The stockholders’ equity section of Lachlin Corporation’s balance sheet at December 31 is presented here.
From a review of the stockholders’ equity section, answer the following questions.
(a) How many shares of common stock are outstanding?
(b) Assuming there is a stated value, what is the stated value of the common stock?
(c) What is the par value of the preferred stock?
(d) If the annual dividend on preferred stock is $36,000, what is the dividend rate on preferred stock?
(e) If dividends of $72,000 were in arrears on preferred stock, what would be the balance reported for retained earnings?
Prepare correct entries for capital stock transactions.
(LO 2), AN
E11-5 Mesa Corporation recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about corporation accounting. During the first month, he made the following entries for the corporation’s capital stock.
On the basis of the explanation for each entry, prepare the entries that should have been made for the capital stock transactions.
Journalize cash dividends and indicate statement presentation.
(LO 3), AP
E11-6 On January 1, Graves Corporation had 60,000 shares of no‐par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following transactions occurred.
|Apr. 1||Issued 9,000 additional shares of common stock for $11 per share.|
|June 15||Declared a cash dividend of $1.50 per share to stockholders of record on June 30.|
|July 10||Paid the $1.50 cash dividend.|
|Dec. 1||Issued 4,000 additional shares of common stock for $12 per share.|
|15||Declared a cash dividend on outstanding shares of $1.60 per share to stockholders of record on December 31.|