E11-4.

Answer questions about stockholders' equity section.

(LO 2, 4), C

The stockholders' equity section of Lachlin Corporation's balance sheet at December 31 is presented here.

LACHLIN CORPORATION Balance Sheet (partial)
Stockholders' equity
Paid-in capital
Preferred stock, cumulative, 10,000 shares authorized, 6,000 shares issued and outstanding	$600,000
Common stock, no par, 750,000 shares authorized, 580,000 shares issued	2,900,000
Total paid-in capital	3,500,000
Retained earnings	1,158,000
Total paid-in capital and retained earnings	4,658,000
Less: Treasury stock (6,000 common shares)	32,000
Total stockholders' equity	$4,626,000

Instructions

From a review of the stockholders' equity section, answer the following questions.

(a)

How many shares of common stock are outstanding?

(b)

Assuming there is a stated value, what is the stated value of the common stock?

(c)

What is the par value of the preferred stock?

(d)

If the annual dividend on preferred stock is $36,000, what is the dividend rate on preferred stock?

(e)

If dividends of $72,000 were in arrears on preferred stock, what would be the balance reported for retained earnings?