Question: 1. The following information is available for Ballard Company for the year ended December 31, 2011.
a. Balance of retained earnings, December 31, 2010, prior to discovery of error, $850,000.
b. Cash dividends declared and paid during 2011, $15,000.
c. It neglected to record 2009 depreciation expense of $55,600, which is net of $5,500 in income taxes.
d. The company earned $205,000 in 2011 net income. Prepare a 2011 statement of retained earnings for Ballard Company.
2. Why would an investor find convertible preferred stock attractive?