Question: The Stockholders’ Equity section of the balance
The Stockholders’ Equity section of the balance sheets for Ztop Corporation on December 31, 20X0, and December 31, 20X1, along with other selected account balances on the two dates is provided below. (Certain information is missing from the statements.)
In 20X1 (the current year), the following transactions affecting equity occurred:
a. Additional shares of common stock were issued in July. No other common stock was issued during the year.
b. A cash dividend of $1 per share was declared and paid on common stock in December.
c. The Treasury Stock—Preferred was purchased at par in January.
d. Additional preferred stock was issued for cash in July.
e. The yearly cash dividend of $0.50 per share was declared and paid on preferred stock outstanding as of December 3, 20X1.
INSTRUCTIONS
Answer the following questions about transactions in 20X1:
1. How many shares of preferred stock were outstanding at year-end?
2. How many common stock shares were outstanding at year-end?
3. How many shares of preferred stock were purchased as treasury stock?
4. How many shares of preferred stock were issued for cash?
5. What was the sales price per share of the preferred stock issued?
6. What was the total cash dividend on preferred stock?
7. What was the total cash dividend on common stock?
Analyze: What is the yearly dividend reduction because of the treasury stock purchase?
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