Question: Lachlin Corporation balance sheet Financial Accounting Tools for Business Decision Making.

1. How many shares of common stock are outstanding?

2. Assuming there is stated value, what is the stated value of the common stock?

3. What is the par value of the preferred stock ?

4. If the annual dividend on preferred stock is $36,000, what is the dividend rate on preferred stock?

5. 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)

December 31

Stockholders' equity

Paid in capital

Preferred stock, cumulative, 10,000

shares authorized, 6,000

shares issued and outstanding $600,000

Common Stock, no par, 750,000

shares authorized, 580,000

shares issued. 2,900,000

Total 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