is the preferred stock cumulative or noncumulative how can you tell 644463

Analyzing the stockholders’ equity section of the balance sheet The balance sheet of Buzzcraft, Inc., reported the following:

Preferred stock, $7 par, 5%,


1,000 shares authorized and issued

$ 7,000

Common stock, $1.50 par value, 43,000 shares authorized;


11,000 shares issued


Paid in capital in excess of par—common


Total paid in capital


Retained earnings


Total stockholders’ equity

$ 327,500

Preferred dividends are in arrears for two years, including the current year. On the balance sheet date, the market value of the Buzzcraft common stock was $28 per share.


1. Is the preferred stock cumulative or noncumulative? How can you tell?

2. What is the total paid in capital of the company?

3. What was the total market value of the common stock?

4. Compute the book value per share of the common stock.