omestead Oil Corp. was incorporated on January 1, 2019, and issued the following stock for cash: 710,000 shares of no-par common stock were authorized; 140,000 shares were issued on January 1, 2019, at $19.00 per share. 290,000 shares of $100 par value, 8.50% cumulative, preferred stock were authorized; 62,000 shares were issued on January 1, 2019, at $140 per share. Net income for the years ended December 31, 2019 and 2020 was $1,240,000 and $2,670,000, respectively. No dividends were declared or paid during 2019. However, on December 28, 2020, the board of directors of Homestead declared dividends of $1,670,000, payable on February 12, 2021, to holders of record as of January 19, 2021.

omestead Oil Corp. was incorporated on January 1, 2019, and issued the following stock for cash: 710,000 shares of no-par common stock were authorized; 140,000 shares were issued on January 1, 2019, at $19.00 per share. 290,000 shares of $100 par value, 8.50% cumulative, preferred stock were authorized; 62,000 shares were issued on January 1, 2019, at $140 per share. Net income for the years ended December 31, 2019 and 2020 was $1,240,000 and $2,670,000, respectively. No dividends were declared or paid during 2019. However, on December 28, 2020, the board of directors of Homestead declared dividends of $1,670,000, payable on February 12, 2021, to holders of record as of January 19, 2021.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 56CE

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