Question

A company had stock outstanding as follows during each of its first three years of operations: 4,000 shares of 8%, $100 par, cumulative preferred stock and 34,000 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. Round dividends per share to the nearest cent. Enter "0" if no dividends are paid.

		Preferred		Common
Year	Dividends	Total	Per Share	Total	Per Share
1	$24,000	$fill in the blank 1	$fill in the blank 2	$fill in the blank 3	$fill in the blank 4
2	32,000	$fill in the blank 5	$fill in the blank 6	$fill in the blank 7	$fill in the blank 8
3	42,680

Answer 1

Solution

	Preferred			Common
Year	Dividends	Total	Per Share	Total	Per Share
1	$ 24,000.00	$ 24,000.00	$           6.00	$                -	$             -
2	$ 32,000.00	$ 32,000.00	$           8.00	$                -	$             -
3	$ 42,680.00	$    40,000.00	$         10.00	$         2,680.00	$          0.08

Working

	Par Value per Preferred share	Dividend rate	Dividend per preffred share	Number of preffered shares	Preffered Dividend
Annual Prefrred Dividend:	100	8.00%	$            8.000	4000	$       32,000.00
	Total Cash dividend Paid	Paid to Preferred	Paid to common	Dividends in arear at year-end
Year 1	$ 24,000	$ 24,000		$ 8,000
Year 2	$ 32,000	$ 32,000	$ 0	$ 8,000
Year 3	$ 42,680	$ 40,000	$ 2,680