Question

The year-end balance sheet of Smithfield Products includes the following stockholders’ equity section (with certain details omitted):
Stockholders’ equity:
7 1⁄2% cumulative preferred stock, $100 par value,
100,000 shares authorized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,400,000
Common stock, $2 par value, 900,000 shares authorized . . . . . . . . . . . . .. . . . . . . . 900,000
Additional paid-in capital: common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,325,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,595,000
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . $14,220,000
Instructions
From this information, compute answers to the following questions:
a. How many shares of preferred stock have been issued?
b. What is the total amount of the annual dividends paid to preferred stockholders?
c. How many shares of common stock are outstanding?
d. What was the average issuance price per share of common stock?
e. What is the amount of legal capital?
f. What is the total amount of paid-in capital?
g. What is the book value per share of common stock? (There are no dividends in arrears.)
h. Assume that retained earnings at the beginning of the year amounted to $717,500 and that net income for the year was $3,970,000. What was the dividend declared during the year on each share of common stock?



$1.99
Sales2
Views264
Comments0
  • CreatedApril 17, 2014
  • Files Included
Post your question
5000