Panther Partners is an investment management company and was recently faxed the stockholders’ equity statement for a company in which an investment was contemplated. The fax machine malfunctioned and certain information was not legible. The following is the smudged fax:

Examine the smudged statement of stockholders' equity, and determine the correct reply to each of the following questions:

If 10,000 preferred shares were issued, what was the per share par value and issue price?

Assuming the preferred dividend reflected a full-year amount at the normal yield, what is the percentage rate associated with preferred stock?

What price per share was received for the newly issued common shares?

How much was the aggregate price paid for the treasury stock purchase?

How many common shares were issued as of the December 31?

What was the market price per share on the date of the stock dividend?

Transcribed Image Text:

PALOMA CORPORATION Statement of Stockholders' Equity For the Year Ending December 31, 20X7 Preferred Common Paid-in Capital in Paid-in Capital in Total Stock, Stock, $2 Excess of $$K Par Par Par-PS Excess of Retained Par-CS Treasury Stockholders' Earnings Stock Equity Balance on January 1 $600,000 $400,000 $550,000 Issuance of common 200,000 $1,550,000 700,000 Issuance of preferred 500,000 $5,000 Purchase treasury stock Net income 275,000 Preferred cash dividends Common cash dividends (25,000) Stock dividend 60,000 (90,000) Balance on December 31 $500,000 $960,000 $690,000 $(160,000)