JKL Company had the following shareholders' equity section at December 31, 2011:

Preferred stock, $100 par, 8% cumulative $1,250,000
Common stock, $2 par value 800,000
Paid-in capital in excess of par, common stock 3,500,000
Retained earnings

3,167,000
Treasury stock (25,000 shares at cost) (300,000 )
Total $8,417,000

1. How many shares of preferred stock are outstanding?
2. What is the total amount received from issuing common stock?
3. How many shares of common stock are issued?
4. What was the average selling price of a share of common stock?
5. If $160,000 of dividends were declared and no dividends were in arrears, how much of that amount would go to the preferred shareholders?
6. If $160,000 of dividends were declared and no dividends were in arrears, how much of that amount would go to the common shareholders?
7. How many shares of common stock are outstanding?
8. If $160,000 of dividends were declared and no dividends were in arrears, how much is the dividend per common share?

What will be an ideal response?

1. 12,500 = $1,250,000 / $100 par
2. $4,300,000 = $800,000 + 3,500,000
3. 400,000 = $800,000 / $2 par
4. $10.75 = ($800,000 + 3,500,000 ) / 400,000 shares
5. $100,000 = $1,250,000 x 8%
6. $60,000 = $160,000 — 100,000
7. 375,000 = 400,000 shares issued — 25,000 treasury shares
8. $0.16 = $60,000 common dividends / 375,000 common shares outstanding