Interpreting the Shareholders' Equity Section Answer the Following Questions Based on the Shareholders' Equity Section

question 22

Essay

Interpreting the shareholders' equity section.
The shareholders' equity section of the balance sheet of Benson Corporation (with certain details omitted) appears below:
$\begin{array}{lr}\text { Shareholders' equity.}\\\text { \( 6 \% \) preference share, \( \$ 100 \) par, 50,000 shares authorized.}\\\text { ?? shares issued } & \$ 700,000 \\\text { Ordinary Share, } \$ 25 \text { par, } 50,000 \text { shares authorized, ?? shares issued } & 625,000 \\\text { Share premium: } & \\ \text { Preference share } & 35,000\\\text { Ordinary share } & \$ 375,000 \\\\\text { Issued and fully paid capital: } & \$ 1,735,000\\\text {Retained earnings}& 740,000 \\\\\text {Total shareholders' equity}&\$2,475,000\end{array}$ Answer the following questions based on the shareholders' equity section given above.
(a) What is the total amount of legal capital?
(b) What is the total amount of dividends paid annually to the preference shareholders?
(c) What is the average issue price of a share of ordinary share?
(d) The balance in retained earnings at the beginning of the current year was $575,000, and there were no dividends in arrears. Profit for the current year was $360,000. What is the amount of the dividends declared on each share of ordinary share during the current year?

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Definitions:

Applied Voltage

The voltage that is externally applied to an electrical device or circuit to initiate the flow of current.

R1

Often denoted as a variable for resistance in electrical equations and diagrams, representing a specific resistor's ohmic value.

Junction Point

A point in an electrical circuit where multiple conductors or components are connected.

Current Paths

Paths followed by electrical current in a circuit.