Farmer Company reports the following amounts for 2013: Net income........................................$135,000 Average stockholders' equity...................500,000 Preferred dividends...............................35,000 Par value

Question:

Farmer Company reports the following amounts for 2013:

Net income........................................$135,000

Average stockholders' equity...................500,000

Preferred dividends...............................35,000

Par value preferred stock........................100,000

The 2013 rate of return on common stockholders' equity is

25.0%

22.5%

27.0%

38.0%

Crain Company issued 2,000 shares of its $5 par value common stock in payment of its attorney's bill of $40,000. The bill was for services performed in helping the company incorporate. Crain should record this transaction by debiting

Legal Expense for.................................. $10,000

Legal Expense for.................................. $40,000

Organization Expense for .........................$10,000

Organization Expense for .........................$40,000

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... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...