In: Accounting
Sandpiper Company has 15,000 shares of cumulative preferred 2% stock, $150 par and 50,000 shares of $30 par common stock. The following amounts were distributed as dividends:
Year 1 | $67,500 |
Year 2 | 36,000 |
Year 3 | 135,000 |
Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'.
Year 1 | Year 2 | Year 3 | |
Preferred stock (Dividends per share) | $ | $ | $ |
Common stock (Dividends per share) | $ | $ | $ |
Interest @ 2% Per year on preferred shares | |||||
Peferred Capital = 15,000 Cumulative pref Shares of $ 150 Each = | $ 22,50,000 | $ 45,000 | |||
Common Share Capital = 50,000 Shares of $ 30 = | $ 15,00,000 | ||||
Cumulative means the if the preference dividend is not paid in the last year then that shoul be accumulate | |||||
in next years payment ot it will carry forward as unpaid dividend | |||||
Year | total Cash Dividend Paid (A) | Paid to Preferred Stock (B) | Paid to Common Shares (A -B) | Dividend in the arreas for 2 year | Remarks |
Year1 | $ 67,500.00 | $ 45,000.00 | $ 22,500.00 | $ - | No Arreas of dividend for preference shares because pais full amount |
Year2 | $ 36,000.00 | $ 36,000.00 | $ - | $ 9,000.00 | Ther eis partly paid only in preference dividend so there is arreas of $ 9000 |
Year3 | $ 1,35,000.00 | $ 54,000.00 | $ 81,000.00 | $ - | Preference Dividend = $ 45000 current dividend + $ 9000 arrears |
Dividend per share = Dividend/ Total outstanding shares | |||||
Preferred | Common | ||||
Total Outstanding shares = | 15000 | 50000 | |||
Dividend per share for Year 1= | $ 3.00 | $ 0.45 | |||
Dividend per share for Year 2= | $ 2.40 | $ - | |||
Dividend per share for Year 3 = | $ 3.60 | $ 1.62 | |||