WW CO has 10,000 shares of $100 par value, 6% convertible stock and 50,000 shares of $10 par value common stock outstanding at Dec 31, 2010.
1. If the preferred stock is cumulative and dividends were last paid on the prederred stock on Dec 31, 2007, what are the dividends in the arrears that should be reported on the Dec 31, 2010 on the ballance sheet. How should these dividends be reported?
2. If the preferred stock is convertible into 7 shares of $10 par value common stock and 3000 shares are converted, what entry is required for the conversion assuming the preffered stock was issued at par value?
3. If the preferred stock was issued at $107 per share, how should the preferred stock be reported in the Stockholders equity section?