Question

A company had stock outstanding as follows during each of its first three years of operations: 3,000 shares of 10%, $100 par, cumulative preferred stock and 51,000 shares of $10 par common stock. The amounts distributed as dividends are presented below. Determine the total and per-share dividends for each class of stock for each year by completing the schedule. If necessary, round dividends per share to the nearest cent. If your answer is zero, please enter "0".

  PreferredCommon

YearDividendsTotalPer ShareTotalPer Share

1$22,500 $ $ $ $

230,000     

346,770     

Answer 1

		Preferred		Common
Year	Dividends	Total	Per Share	Total	Per Share
1	$ 22,500	$ 22,500	$       7.50	$0	$0
2	$ 30,000	$ 30,000	$    10.00	$0	$0
3	$ 46,770	$ 37,500	$    12.50	$    9,270	$       0.18

Explanations :-

	Year 1	Year 2	Year 3
Total dividends declared (a)	$ 22,500	$ 30,000	$ 46,770
Preferred Dividend (For Current year) (b)	$ 22,500	$ 22,500	$ 30,000
Preferred Dividend in arrears (c)	$           -	$    7,500	$    7,500
Total Preferred dividends (d) = (b) + (c)	$ 22,500	$ 30,000	$ 37,500
Comon dividend (e) = (a) - (d)	$0	$0	$    9,270
Dividend Per Share
Preferred Stock (d ÷ 3000 shares)	$      7.50	$    10.00	$    12.50
Common stock (e ÷ 51000 shares)	$0	$0	$      0.18