ABC Inc. has the following items in their current balance sheet: Common Stock 10,000,000 shares authorized, $1,000,000

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Question:

ABC Inc. has the following items in their current balance sheet:

Common Stock 10,000,000 shares authorized, $1,000,000 issued $3,000,000

Capital Surplus $9,000,000

Treasury Stock on Common 100,000 shares $6,000,000

Cumulative Preferred Stock 500,000 authorized

[2%] $100 par $8,000,000

Treasury Stock on Preferred Stock 10000 shares $6,000,000

Retained Earnings $60,000,000

ABC Inc. wishes to announce a total cash dividend of $40,000,000. How is this dividend to be split between the common and preferred stockholders?

What is the dividend per share for common and preferred after the dividend distribution from question 1 above?

Suppose ABC Inc. was two years in the arrears in paying dividends to the preferred stockholders, and then what is the dollar amount of the preferred and common shareholder dividend?

If ABC Inc. announces a 4 for 1 stock split on the cumulative preferred then what is the new total amount of the preferred stock?

If ABC Inc. were to provide for a 10% common stock dividend, then how many new shares are to be mailed to existing shareholders?

Assume in question [6] the market price of the common stock was $15 at the time of the stock dividend announcement. What is the journal entry to record the stock dividend?

Using the equity portion of the ABC Inc. balance sheet above, determine the amount of the total equity in ABC Inc. Assume this question ignores the results of questions [1-7] above.