The stockholders’ equity section of Jarvis Corporation at December 31 is as follows

Instructions

From a review of the stockholders’ equity section, as chief accountant, write a memo to the president of the company answering 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 $30,000, what is the dividend rate on preferred stock?

(e) If dividends of $60,000 were in arrears on preferred stock, what would be the balance in Retained Earnings?

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JARVIS CORPORATION Balance Sheet (partial) Paid-in capital Preferred stock, cumulative, 10,000 shares authorized, 6,000 shares issued and outstanding Common stock, no par, 750,000 shares authorized, 600,000 shares issued Total paid-in capital Retained earnings Total paid-in capital and retained earnings Less: Treasury stock (10,000 common shares) Total stockholders' equity 1,200,000 1,500,000 1,858,000 3,358,000 (64,000) $3,294,000