The stockholders’ equity section of Lachlin Corporation’s balance sheet at December 31 is presented

Question

The stockholders’ equity section of Lachlin Corporation’s balance sheet at December 31 is presented

here.

From a review of the stockholders’ equity section, answer the following questions.

(a) How many shares of common stock are outstanding?

(b) Assuming there is a stated value, what is the stated value of the common stock?

(c) What is the par value of the preferred stock?

(d) If the annual dividend on preferred stock is $36,000, what is the dividend rate on preferred stock?

(e) If dividends of $72,000 were in arrears on preferred stock, what would be the balance reported for retained earnings?

LACHLIN CORPORATION Balance Sheet (partial)
Stockholders’ equity
Paid-in capital
Preferred stock, cumulative, 10,0[11 shapes authorized,
6,000 Shara issued and outstanding $ 600,000
Common stock, no par, 750,000 shares authorized,
530,000 shapes issued 2,900,000
Tbta] paid-in capital 3,500,000
Retained earnings 1,158,000
Total paid—in capital and retained earnings 4, 658,000
Less: Treasury stock (6,000 common shares) 32,000 Total stockholders’ equity $4,626,000
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