Problem
Raphael Corporation's balance sheet shows the following stockholders' equity section.
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Preferred stock-5% cumulative, $___ par value, 1,000 shares authorized, issued, and outstanding
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$ 50,000
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Common stock-$___ par value, 4,000 shares authorized, issued, and outstanding
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80,000
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Retained earnings
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150,000
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Total stockholders' equity
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$ 280,000
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Task
• Determine the par values of the corporation's preferred stock and its common stock.
• If two years' preferred dividends are in arrears at the current date and the board of directors declares cash dividends of $11,500, compute the total amount paid to (i) preferred shareholders and (ii) common shareholders.