The stockholders’ equity section of Ahab Corporation at December 31 is as follows.Ahab CorporationBalance Sheet (partial)Paid-in capitalPreferred stock, cumulative, 10,000 shares authorized, 5,000shares issued and outstanding ………………… $ 300,000Common stock, no par, 750,000 shares authorized, 600,000 shares issued .. 1,200,000Total paid-in capital …………………… 1,500,000Retained earnings ……………………. 1,858,000Total paid-in capital and retained earnings ……………. 3,358,000Less: Treasury stock (75,000 common shares) ………….. 75,000Total stockholders’ equity ………………… $3,283,000InstructionsFrom a review of the stockholders’ equity section, as chief accountant, write a memo to the president of the company answering 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 $30,000, what is the dividend rate on preferred stock?(e) If dividends of $60,000 were in arrears on preferred stock, what would be the balance in Retained Earnings?View Solution:
The stockholders equity section of Ahab Corporation at December



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