The year-end balance sheet of Manor, Inc., includes the following stockholders’ equity section(with certain details omitted):Stockholders’ equity:10% cumulative preferred stock, $100 par value,authorized 100,000 shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,400,000Common stock, $2 par value, authorized2,000,000 shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,400,000Additional paid-in capital: common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,800,000Donated capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,000Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,160,000Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18,160,000 InstructionsFrom this information, compute answers to the following questions:a. How many shares of preferred stock have been issued?b. What is the total amount of the annual dividends paid to preferred stockholders?c. How many shares of common stock are outstanding?d. What was the average issuance price per share of common stock?e. What is the amount of legal capital?f. What is the total amount of paid-in capital?g. What is the book value per share of common stock? (There are no dividends in arrears.)h. Assume that retained earnings at the beginning of the year amounted to $1,200,000 and thenet income for the year was $4,800,000. What was the dividend declared during the year on each share of common stock? (Hint: Net income increases retained earnings, whereas divi-dends decrease retained earnings.)
The year-end balance sheet of Manor, Inc., includes the following
(with certain details omitted):
Stockholders’ equity:
10% cumulative
authorized 100,000 shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,400,000
Common stock, $2 par value, authorized
2,000,000 shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,400,000
Additional paid-in capital: common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,800,000
Donated capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,000
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18,160,000
Instructions
From this information, compute answers to the following questions:
a. How many shares of preferred stock have been issued?
b. What is the total amount of the annual dividends paid to preferred stockholders?
c. How many shares of common stock are outstanding?
d. What was the average issuance price per share of common stock?
e. What is the amount of legal capital?
f. What is the total amount of paid-in capital?
g. What is the book value per share of common stock? (There are no dividends in arrears.)
h. Assume that retained earnings at the beginning of the year amounted to $1,200,000 and the
net income for the year was $4,800,000. What was the dividend declared during the year on
each share of common stock? (Hint: Net income increases retained earnings, whereas divi-
dends decrease retained earnings.)
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