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The shareholders, equity section of the tinker corporation as at 31 December 2018 was as follows:
TINKER CORPORATION
TATEMENT OF FINANCIAL POSITION (EXTRACT)
Paid in capital
Preferred stock, Cumulative, 10,000 shares authorized, 6000 shares issued and outstanding$600000
Common stock, no par 750000 authorized, 600000 shares issued$1200,000
Total paid in capital$1800000
Retained earnings$1858000
Total paid in capital and retained earnings$3658000
Less treasury stock (12000 shares)$64000
Total shareholder equity$3594000
The CEO of the company does not understand the above statement clearly
Required
Review the stockholders the stockholder's equity section and as chief Accountant, answer the following questions from the CEO.
a)How many shares are outstanding
b)Assuming there is a stated value, what is the standard value of the common stock?
c)What is the par value of the preferred stock
d)If the annual dividend preferred stock is $3000000, what is the dividend rate on the preferred stock
e)If dividends of $ 60,000,000 were in arrears on the preferred stock, what will be the balance of the retained earnings
f)Explain the following terms
Earning per share
Retained earning
Preferred stock
Share issued
Answer & Explanation
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