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How much is considered contributed capital

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Reference no: EM132483236

Several accounts and amounts from Fast Food Franchise, Inc.'s accounting records appear below:

Preferred stock, 7%, $40 par, 600 shares authorized, cumulative, 300 shares issued: $ 12,000

Common treasury stock, 200 shares at cost: 20,000

Additional paid-in capital-preferred: 16,000

Retained earnings: 24,000

Common stock, $4 par value, authorized 4,000 shares: 4,000

Additional paid-in capital - common: 46,000

  • The market price of the stock on December 31 was $20 per share. All the shares of common stock were issued on May 1, two years earlier.

Answer each of the following independent questions:

Question A. How much is considered "contributed capital"?

Question B. How much was each share of common stock initially sold for?

Question C. If Fast Food Franchise did not pay dividends the first two years of operations, what effect would the cumulative feature have on year three when dividends are declared?

Question D. How many shares of common stock would be outstanding immediately after a 4-for-1 forward split?

Question E. How many shares of common stock will be outstanding immediately after the declaration of a 15% common stock dividend?

Question F. What impact will a 15% common stock dividend have on total stockholders' equity?

Reference no: EM132483236

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