Q40PGA_1 - Horngren'S Financial And Managerial Accounting

Question

A Identifying sources of equity, stock issuance, and dividends

Voyage Comfort Specialists, Inc. reported the following stockholders’ equity on its balance sheet at June 30, 2018:

Preferred Stock—7%, ? Par Value; 625,000 shares

 authorized, 280,000 shares issued and outstanding

Paid-In Capital:

\( 1,400,000

1,340,000

Stockholders’ Equity

Paid-In Capital in Excess of Par—Common 2,900,000

Total Paid-In Capital 5,640,000

Retained Earnings 12,000,000

Total Stockholders’ Equity \) 17,640,000

Common Stock—$1 Par Value; 3,000,000 shares 

 authorized, 1,340,000 shares issued and outstanding

Requirements

1. Identify the different classes of stock that Voyage Comfort Specialists has outstanding.

Step-by-Step Solution

Answer

Preferred stock including280,000 shares and Common stock including 1,340,000 shares are outstanding.

Step 1: Basic Introduction

Outstanding stock is the number of shares whether preferred and/or common issued by a corporation out of the authorized number of shares in the open market.

Step 2: The different classes of stock outstanding-

Preferred stock 280,000 shareissued and outstanding i.e., $1,400,000

Common stock 1,340,000 sharesissued and outstanding i.e., $1,340,000