Whitman Outdoor Furniture Company included the following stockholders’ equity on its year-end balance sheet at February 28, 2015:Stockholders’ EquityPreferred stock, 6.5% cumulative—par value $15 per share;authorized 110,000 shares in each classClass A—issued 75,000 shares…………………………. $ 1,125,000Class B—issued 96,000 shares………………………….. 1,440,000Common stock—$10 par value:authorized 2,000,000 shares,issued 245,000 shares…………………………………………. 2,450,000Additional paid-in capital—common…………………….4,570,000Retained earnings……………………………………………….8,890,000 $18,475,000Requirements1. Identify the different issues of stock that Whitman Outdoor Furniture Company has outstanding.2. Give the summary entries to record issuance of all the Whitman stock. Assume that all the stock was issued for cash. Explanations are not required.3. Suppose Whitman passed its preferred dividends for three years. Would the company have to pay those dividends in arrears before paying dividends to the common stockholders? Give your reason.4. What amount of preferred dividends must Whitman declare and pay each year to avoid having preferred dividends in arrears?5. Assume that preferred dividends are in arrears for 2014. Journalize the declaration of an $825,000 dividend on February 28, 2015. An explanation is not required.View Solution:
Whitman Outdoor Furniture Company included the following stockholders equity on



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *