Response to the following problem:
Pranks, Inc. is a manufacturer of joke and novelty products for perpetrators of practical jokes. The corporation has paid several cash dividends throughout 2016, and is also declaring a stock dividend to its stockholders as the calendar year-end approaches. You've been brought in as a consultant to assist with this process, and also to help determine whether some missing information can be calculated before the distribution of the stock dividend is made. The company has two classes of stock: common stock and cumulative preferred stock.You've been able to retrieve the following information so far:
| Number of common shares authorized |
800,000 |
| Number of common shares issued |
650,000 |
| Par value of common shares |
$20 |
| Par value of cumulative preferred shares |
$30 |
| Paid-in capital in excess of par-common stock |
$7,000,000 |
| Paid-in capital in excess of par-preferred stock |
$0 |
| Total retained earnings before the stock dividend is declared |
$33,500,000 |
| Total Cash | Preferred Dividends | Common Dividends |
| Year | Dividends | Total | Per Share | Total | Per Share |
| 2011 |
20,000 |
20,000 |
20 |
0 |
0.00 |
| 2012 |
36,000 |
36,000 |
0.36 |
0 |
0.00 |
| 2013 |
88,000 |
34,000 |
0.34 |
54,000 |
0.09 |
| 2014 |
120,000 |
30,000 |
0.30 |
90,000 |
0.15 |
| 2015 |
138,000 |
30,000 |
0.30 |
108,000 |
0.18 |
| 2016 |
210,000 |
30,000 |
0.30 |
180,000 |
0.30 |
Cash DividendsThe accounting manager for the company prepared the schedule of cash dividends paid over the period 2011-2016 on the Pranks, Inc. panel. However, one of the reasons for Pranks, Inc.'s missing information is that the manager is away on vacation and is unreachable by phone, because he is backpacking on a remote island that does not have cell phone reception. Management would like you to determine some information from the data you've collected regarding its outstanding stock.Fill in the answers below.
How many shares of common stock are outstanding?
How many shares of preferred stock are outstanding?
What is the preferred dividend as a percent of par?