XACC 291 Week 5 Answer Guide
The following ACC 291 accounting study guide is designed to help students taking accounting principles II at the undergraduate level.
What's Included in the Study Guide?
- Full Solutions for E11-11 Lumley Corporation Memo
- All Work Shown
- Textbook: Financial accounting: Tools for business decision making
- Unlimited Additional Support from ACCNerd Accounting Experts
Preview of Solutions
From a review of the stockholders’ equity section, as chief accountant, write a memo
to the president of the company answering the following questions.
(a) How many shares of common stock are outstanding?
600,000 shares issued – 12,000 treasury shares = 588,000 common shares 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 $30,000,what is the dividend rate on preferred stock?
(e) If dividends of $60,000 were in arrears on preferred stock, what would be the balance in Retained Earnings?
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