If dividends of $72,000 were in arrears on preferred stock, what would be the balance reported for retained earnings?

Zohpius

May 6, 2023

Accounting
MAISTYLE CORPORATION
Balance Sheet (partial)
Stockholders’ equity

Paid-in capital

Preferred stock, cumulative, 10,000 shares authorized, 6,000 shares issued and outstanding
$900,000
Common stock, no par; 750,000 shares authorized, 600,000 shares issued
1,800,000
Total paid-in capital
2,700,000
Retained earnings
1,158,000
Total paid-in capital and retained earnings
3,858,000
Less: Treasury stock (8,000 common shares)
(32,000)
Total stockholders’ equity
$3,826,000

Instructions
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?

Problem 2. On January 1 Weiss Corporation had 75,000 shares of $0.5 par value common stock issued and outstanding. During the year, the following transactions occurred.
Apr. 1
Issued 8,000 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.
Dec. 15
Declared a cash dividend on outstanding shares of $1.70 per share to stockholders of record on December 31.

Instructions
(a) Prepare the entries for the above transactions.
(b) How are dividends and dividends payable reported in the financial statements prepared at December 31?

Problem 3. CORPORATE EQUITY TRANSACTIONS
1. Issued 5,000 shares of no-par common stock. The market price of the stock is $12 per share.
2. Issued 2,000 shares of 5%, $100 par, cumulative preferred stock for $122 per share.
3. Declared dividends on preferred dividend of 5% per share.
4. Purchased 500 shares of common stock at $14 for treasury.
5. Paid preferred dividend declared in #3.
6. Sold 100 sharestreasury stock at $20 per share.
Instructions: Journalize the transactions for Fortier Company.

Problem 4. Norris Corporation was organized on January 1, 2021. It is authorized to issue 20,000 shares of 6%, $50 par value preferred stock and 500,000 shares of no-par common stock with a stated value of $1 per share. The following stock transactions were completed during the first year.
Jan. 10
Issued 60,000 shares of common stock for cash at $4 per share.
Mar. 1
Issued 12,000 shares of preferred stock for cash at $54 per share.
May 1
Issued 100,000 shares of common stock for cash at $5 per share.
Sept. 1
Issued 5,000 shares of common stock for cash at $8 per share.
Nov. 1
Issued 2,000 shares of preferred stock for cash at $56 per share.

Instructions
(a) Journalize the transactions.
(b) Post to the stockholders’ equity accounts. (Use T accounts.)
(c) Prepare the paid-in capital portion of the stockholders’ equity section at December 31, 2021.