Problem

Comprehensive problem—calculate missing amounts, dividends, total shares, and per share in...

Comprehensive problem—calculate missing amounts, dividends, total shares, and per share information Allyn, Inc., has the following owners’ equity section in its November 30, 2010, balance sheet:

Paid-in capital:

 

12% preferred stock, $60 par value, 1,500 shares

 

authorized, issued, and outstanding

  $ ?

Common stock, $8 par value, 100,000 shares

 

authorized, ? shares issued, ? shares outstanding

  240,000

Additional paid-in capital on common stock

  540,000

Additional paid-in capital from treasury stock

  13,000

Retained earnings

  97,000

Less: Treasury stock, at cost (2,000 shares of common)

  (18,000)

Total stockholders’ equity

  $ ?

Required:

a. Calculate the amount of the total annual dividend requirement on preferred stock.


b. Calculate the amount that should be shown on the balance sheet for preferred stock.


c. Calculate the number of shares of common stock that are issued and the number of shares of common stock that are outstanding.


d. On January 1, 2010, the firm’s balance sheet showed common stock of $210,000 and additional paid-in capital on common stock of $468,750. The only transaction affecting these accounts during 2010 was the sale of some common stock. Calculate the number of shares that were sold and the selling price per share.


e. Describe the transaction that resulted in the additional paid-in capital from treasury stock.


f. The retained earnings balance on January 1, 2010, was $90,300. Net income for the past 11 months has been $24,000. Preferred stock dividends for all of 2010 have been declared and paid. Calculate the amount of dividends on common stock during the first 11 months of 2010.

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