Short Problems
1.Total dividends of $7,000 are declared when one year of dividends are in arrears on 1,000 shares of $8 cumulative preferred stock. How much of the $7,000 of dividends goes to the common shareholders?
2.The following information from St. Paul Supply, Inc.is provided for 2010 and 2009:
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12/31/10
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12/31/09
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12% Cumulative preferred stock, $20 par
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$200,000
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$200,000
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Common stock, $5 par
|
40,000
|
28,000
|
Additional paid-in capital - common
|
80,000
|
50,000
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Retained earnings
|
500,000
|
500,000
|
Net income
|
60,000
|
40,000
|
Additional information:
No preferred dividends were declared during 2009. The market price of the common stock was $25 at December 31, 2010. Calculate the book value per share of common stock at December 31, 2010.
3.Total dividends of $40,000 are declared when one year of dividends is in arrears on 5,000 shares of $3 cumulative preferred stock. Calculate dividends on common stock.
4.Total dividends of $13,000 are declared when two years of dividends are in arrears on 1,000 shares of par $50, 10%, cumulative preferred stock. Calculate the dividends that were declared on common stock.
5.The board of directors desires to pay $40,000 of dividends to its common shareholders when two years of dividends are in arrears on 1,000 shares of $20 par, 10% cumulative preferred stock. How much total dividends must be declared?
6.On January 23, Borders Corporation purchased 1,000 shares of its own common stock for $30 a share. On March 31, it sold 600 of those shares for $42 a share. How much is the gain reported on the income statement resulting from the sale of treasury stock?