Question

Please explain work.

As of January 2018, Evite Fashions Co has 5% preferred stock, $100 par value, 25,000 shares issued and outstanding; common stock, $3 par value, 150,000 shares issued and outstanding.

The following dividends were delcared and paid in 2018, 2019 and 2020.

2017 No dividends were declared and paid

2018 25,000

2019 50,000

2020 200,000

2021 850,000

For common stock holders and non-cummulative

a) assuming the preferred stock were non-cummulative, how much dividends did preferred and common stockholders recieve for each year dividends were declared

b) calculate dividend per share for each year.

For common stock holders and cummulative

a) assuming the preferred stock were cummulative, how much dividends did preferred and common stockholders recieve for each year dividends were declared

b) calculate dividend per share for each year

Answer 1

For common stock holders and non-cummulative
Statementshowing Computations
Paticulars	2014	2015	2016	2017	2018
Total Dividend Paid	-	25,000.00	50,000.00	200,000.00	850,000.00
Preference Dividend to be paid = 25,000*100*5%	-	25,000.00	50,000.00	125,000.00	125,000.00
Dividend available for common stock	-	-	-	75,000.00	725,000.00
Dividend per share of preferred stock	-	1.00	2.00	5.00	5.00
Dividend per share of common stock	-	-	-	0.50	4.83
For common stock holders and cummulative
Statementshowing Computations
Paticulars	2014	2015	2016	2017	2018
Total Dividend Paid	-	25,000.00	50,000.00	200,000.00	850,000.00
Preference Dividend to be paid = 250,000*40*6%	125,000.00	125,000.00	125,000.00	125,000.00	125,000.00
Preference Dividend Paid = Existing + arrears	-	25,000.00	50,000.00	200,000.00	350,000.00
Dividend available for common stock	-	-	-	-	500,000.00
Arrears of preference Dividend	125,000.00	225,000.00	300,000.00	225,000.00	600,000.00
Dividend per share of preferred stock	-	1.00	2.00	8.00	14.00
Dividend per share of common stock	-	-	-	-	3.33