Question

Dividends Per Share

Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 11,000 shares of cumulative preferred 2% stock, $160 par, and 37,000 shares of $20 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $23,540; second year, $56,860; third year, $69,630; fourth year, $91,810.

Compute the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, enter "0".

	1st Year	2nd Year	3rd Year	4th Year
Preferred stock (dividend per share)	$	$	$	$
Common stock (dividend per share)	$	$	$	$

2. Issuing Stock

Work Place Products Inc., a wholesaler of office products, was organized on July 1 of the current year, with an authorization of 50,000 shares of 1% preferred stock, $40 par and 350,000 shares of $15 par common stock. The following selected transactions were completed during the first year of operations:

Journalize the transactions.

July. 1. Issued 80,000 shares of common stock at par for cash.

July. 1

July. 1 Issued 400 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.

July. 1

Aug. 7. Issued 23,500 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $64,000, $350,000, and $79,500, respectively.

For a compound transaction, if an amount box does not require an entry, leave it blank.

Aug. 7

Sept. 20. Issued 18,000 shares of preferred stock at $53 for cash.

For a compound transaction, if an amount box does not require an entry, leave it blank.

Sept. 20

Answer 1

Solution 1:

Computation of dividend per share to Preferred and common shareholders - Imaging Inc.
Year	Total Dividends (A)	Preferred dividend per year (B)	Preferred dividend paid ( C )	Preferred dividend in arrear (D) (B - C)	Preferred dividend per share (C/11000)	Common dividend paid ( E )(A - C)	Common dividend per share (E/37000)
1	$23,540.00	$35,200.00	$23,540.00	$11,660.00	$2.14	$0.00	$0.00
2	$56,860.00	$35,200.00	$46,860.00	$0.00	$4.26	$10,000.00	$0.27
3	$69,630.00	$35,200.00	$35,200.00	$0.00	$3.20	$34,430.00	$0.93
4	$91,810.00	$35,200.00	$35,200.00	$0.00	$3.20	$56,610.00	$1.53

Solution 2:

Journal Entries - Work Place Products Inc.
Date	Particulars	Debit	Credit
1-Jul	Cash Dr	$1,200,000.00
	To Common stock		$1,200,000.00
	(To record issue of common stock)
1-Jul	Organization expenses Dr	$6,000.00
	To Common stock		$6,000.00
	(To record issue of share of payment of legal fees)
7-Aug	Land Dr	$64,000.00
	Building Dr	$350,000.00
	Equipment Dr	$79,500.00
	To Common stock (23500*$15)		$352,500.00
	To Paid in capital in excess of par - Common stock		$141,000.00
	(To record purchase of land, building and equipment)
20-Sep	Cash Dr	$954,000.00
	To Preferred stock (18000*$40)		$720,000.00
	To Paid in capital in excess of par - Preferred stock (18000*$13)		$234,000.00
	(To record issue of preferred stock)