Early in 2018, Robbinsville Press was organized with authorization to issue 100,000 shares of $100 par value preferred stock and 500,000 shares of $1 par value common stock. Ten thousand shares of the preferred stock were issued at par, and 170,000 shares of common stock were sold for $15 per share. The preferred stock pays an 8 percent cumulative dividend. During the first four years of operations (2018 through 2021), the corporation earned a total of $1,385,000 and paid dividends of 75 cents per share in each year on its outstanding common stock. Required: a. Prepare the stockholders' equity section of the balance sheet at December 31, 2021. b. Are there any dividends in arrears on the company's preferred stock at December 31, 2021

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Answer:

Part a

The stockholders' equity section of the balance sheet at December 31, 2021.

Preferred Stock 10,0000 at $100  

Common Stock 170,000 at $1

Paid in excess 170,000 at $14

Part b

Dividends in arrears on the company's preferred stock at December 31, 2021

Explanation:

Only issued Share Capital is presented in the stockholders' equity section of the balance sheet.