Fill in the blanks for the missing elements in the following three statements: Corporation _____________ transactions are tracked in two different accounts;  ________________accounts track owner contributions separately from earnings. Earnings and earning distributions are tracked in the __________________________ account. Stock Example 1: Longpre Inc. is authorized to issue 1,500,000 shares of its $1 par value common stock and 400,000 shares of $50 par value preferred stock. Longpre plans to sell 20,000 shares of common stock at $38.50 and 1,000 shares of its preferred stock at $55 per share. How much capital will Longpre generate by this sale? What would be Longpre’s legal capital? Stock Example 2: Howe Corporation plans to issue 7,400 shares of its $1 par value common stock for $34 per share and 800 shares of its $30 par value preferred stock for $33 per share. What would Howe’s legal capital be? What would be the amount of capital received in excess of the par value of common and preferred stock? Why is a distinction made between legal capital and total capital? Corporation Dividend Examples - Situation 1:Assume a company has 100,000 shares of common stock with a $1 par value outstanding when it declares a 2 for 1 stock split. After the split, how many shares are outstanding and what is the par value? Situation 2: Assume a company has 100,000 shares of common stock with a $1 par value outstanding when it declares a 1 for 4 reverse stock split. After the split, how many shares are outstanding and what is the par value? Situation 3:Assume that the Board of Directors of ABC Corporation meets on April 1 and declares a dividend of $500,000 payable on June 1 to stockholders of record on May 1. ABC Company currently has 100,000 shares of common stock and 20,000 shares of $100 par, 8% preferred stock outstanding. What happens on each date and how large is the dividend for each class of stock? Situation 4:Now assume dividends are 2 years in arrears for the information listed above. What is the dividend for common stockholders? More Dividend Examples – Dividends in ArrearsDeWine Corporation had the following stocks issued and outstanding when the board of directors proposed a $450,000 dividend:Preferred stock: 40,000 shares issued and 36,000 shares outstanding, 8%, $30 parCommon stock: 100,000 shares issued and 90,000 shares outstanding, $1 parDetermine the amount of dividends each class of stock would receive given the assumptions provided below. Also - determine the divided per share for preferred and common stock in each of the scenarios. Situation 1: Preferred stock is noncumulative:Dividend per share – Situation 1:************************************************************Situation 2: Preferred stock is cumulative (two years in arrears):Dividend per share – Situation 2: *****************************************************************Situation 3: Preferred stock is cumulative (one year in arrears):Dividend per share – Situation 3:

Fill in the blanks for the missing elements in the following three statements: Corporation _ transactions are tracked in two different accounts;  accounts track owner contributions separately from earnings. Earnings and earning distributions are tracked in the ______________ account. Stock Example 1: Longpre Inc. is authorized to issue 1,500,000 shares of its $1 par value common stock and 400,000 shares of $50 par value preferred stock. Longpre plans to sell 20,000 shares of common stock at $38.50 and 1,000 shares of its preferred stock at $55 per share. How much capital will Longpre generate by this sale? What would be Longpre’s legal capital? Stock Example 2: Howe Corporation plans to issue 7,400 shares of its $1 par value common stock for $34 per share and 800 shares of its $30 par value preferred stock for $33 per share. What would Howe’s legal capital be? What would be the amount of capital received in excess of the par value of common and preferred stock? Why is a distinction made between legal capital and total capital? Corporation Dividend Examples - Situation 1:Assume a company has 100,000 shares of common stock with a $1 par value outstanding when it declares a 2 for 1 stock split. After the split, how many shares are outstanding and what is the par value? Situation 2: Assume a company has 100,000 shares of common stock with a $1 par value outstanding when it declares a 1 for 4 reverse stock split. After the split, how many shares are outstanding and what is the par value? Situation 3:Assume that the Board of Directors of ABC Corporation meets on April 1 and declares a dividend of $500,000 payable on June 1 to stockholders of record on May 1. ABC Company currently has 100,000 shares of common stock and 20,000 shares of $100 par, 8% preferred stock outstanding. What happens on each date and how large is the dividend for each class of stock? Situation 4:Now assume dividends are 2 years in arrears for the information listed above. What is the dividend for common stockholders? More Dividend Examples – Dividends in ArrearsDeWine Corporation had the following stocks issued and outstanding when the board of directors proposed a $450,000 dividend:Preferred stock: 40,000 shares issued and 36,000 shares outstanding, 8%, $30 parCommon stock: 100,000 shares issued and 90,000 shares outstanding, $1 parDetermine the amount of dividends each class of stock would receive given the assumptions provided below. Also - determine the divided per share for preferred and common stock in each of the scenarios. Situation 1: Preferred stock is noncumulative:Dividend per share – Situation 1:Situation 2: Preferred stock is cumulative (two years in arrears):Dividend per share – Situation 2: *****Situation 3: Preferred stock is cumulative (one year in arrears):Dividend per share – Situation 3:

Administration Of Wills/Trusts/ And Estates

5th Edition

ISBN:9781285281308

Author:Brown

Publisher:Brown

Chapter12: Probating A Will And Administering An Estate

Section: Chapter Questions

Problem 4SYPS

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Related questions

Question

Stock Example 1: Longpre Inc. is authorized to issue 1,500,000 shares of its $1
par value common stock and 400,000 shares of $50 par value preferred stock. Longpre
plans to sell 20,000 shares of common stock at $38.50 and 1,000 shares of its preferred
stock at $55 per share. How much capital will Longpre generate by this sale? What
would be Longpre’s legal capital?

Stock Example 2: Howe Corporation plans to issue 7,400 shares of its $1 par value
common stock for $34 per share and 800 shares of its $30 par value preferred stock for
$33 per share. What would Howe’s legal capital be? What would be the amount of
capital received in excess of the par value of common and preferred stock? Why is a
distinction made between legal capital and total capital?

Corporation Dividend Examples -

Situation 1:
Assume a company has 100,000 shares of common stock with a $1 par value
outstanding when it declares a 2 for 1 stock split. After the split, how many shares are
outstanding and what is the par value?

Situation 2:

Assume a company has 100,000 shares of common stock with a $1 par value
outstanding when it declares a 1 for 4 reverse stock split. After the split, how many
shares are outstanding and what is the par value?

Situation 3:
Assume that the Board of Directors of ABC Corporation meets on April 1 and declares a
dividend of $500,000 payable on June 1 to stockholders of record on May 1. ABC
Company currently has 100,000 shares of common stock and 20,000 shares of $100
par, 8% preferred stock outstanding. What happens on each date and how large is the
dividend for each class of stock?

Situation 4:
Now assume dividends are 2 years in arrears for the information listed above. What is
the dividend for common stockholders?

More Dividend Examples –

Dividends in Arrears
DeWine Corporation had the following stocks issued and outstanding when the board of
directors proposed a $450,000 dividend:
Preferred stock: 40,000 shares issued and 36,000 shares outstanding,
8%, $30 par
Common stock: 100,000 shares issued and 90,000 shares outstanding,
$1 par
Determine the amount of dividends each class of stock would receive given the
assumptions provided below. Also - determine the divided per share for preferred and
common stock in each of the scenarios.

Situation 1: Preferred stock is noncumulative:
Dividend per share – Situation 1:
************************************************************
Situation 2: Preferred stock is cumulative (two years in arrears):
Dividend per share – Situation 2:

*****************************************************************
Situation 3: Preferred stock is cumulative (one year in arrears):
Dividend per share – Situation 3:

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