The stockholders' equity section of Creighton Company's balance sheet is shown as follows. CREIGHTON COMPANY As of

Question:

The stockholders' equity section of Creighton Company's balance sheet is shown as follows.

CREIGHTON COMPANY

As of December 31, 2018

Stockholders' equity

Preferred stock, $10 stated value, 7% cumulative,

300 shares authorized, 50 issued and outstanding.............................................$ 500

Common stock, $10 par value, 250 shares authorized,

100 issued and outstanding...............................................................................1,000

Common stock, class B, $20 par value, 400 shares

authorized, 150 issued and outstanding............................................................3,000

Common stock, no par, 150 shares authorized, 100 issued and outstanding....2,200

Paid-in capital in excess of stated value-preferred............................................600

Paid-in capital in excess of par value-common...............................................1,200

Paid-in capital in excess of par value-class B common.....................................750

Retained earnings..............................................................................................7,000

Total stockholders' equity.............................................................................$16,250

Required

a. Assuming the preferred stock was originally issued for cash, determine the amount of cash that was collected when the stock was issued.

b. Based on the class B common stock alone, determine the amount of the company's legal capital.

c. Based on the class B common stock alone, determine the minimum amount of assets that must be retained in the company as protection for creditors.

d. Determine the number of shares of class B common stock that are available to sell as of December 31, 2018.

e. Assuming Creighton purchases treasury stock consisting of 25 shares of its no par common stock on January 1, 2019, determine the amount of the no-par common stock that would be outstanding immediately after the purchase.

f. Based on the stockholders' equity section shown above, can you determine the market value of the preferred stock? If yes, what is the market value of one share of this stock?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...