What is equity in accounting?

Accounting homework help please (dividends/stockholders' equity/etc)?

• The stockholders' equity section of Traylor Corporation's balance sheet at December 31 is presented here. TRAYLOR CORPORATION Balance Sheet (partial) Stockholder's equity Paid-in capital Preferred stock, cumulative, 10,500 shares authorized, 6,300 shares issued and outstanding $630,630 Common stock, no par, 860,375 shares authorized, 688,300 shares issued 2,753,200 Total paid-in capital 3,383,830 Retained earnings 1,174,770 Total paid-in capital and retained earnings 4,558,600 Less: Treasury stock (8,960 common shares) (35,840) Total stockholder's equity $4,522,760 If the annual dividend on preferred stock is $39,100, what is the dividend rate on preferred stock? If dividends of $76,600 were in arrears on preferred stock, what would be the balance reported for retained earnings? please explain how you got the answers / any formulas you used. thanks!

• Answer:

  If the annual dividend on preferred stock is $39,100, what is the dividend rate on preferred stock? 39,100 / 630,630 = 6.2% If dividends of $76,600 were in arrears on preferred stock, what would be the balance reported for retained earnings? The balance would be the same, $1,174,770. Dividends in arrears do not affect Retained Earnings. Dividends must be declared before they become a liability and affect Retained Earnings.