In: Accounting
Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 23,000 shares of cumulative preferred 4% stock, $150 par, and 77,000 shares of $25 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $92,460; second year, $193,540; third year, $240,940; fourth year, $270,440. 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) $ $ $ $
Dividend on preferred shares | ||||||||
23,000*4%*150 | ||||||||
138000 | ||||||||
First year | ||||||||
dividend to preferred stock = | 92460/23000 | |||||||
4.02 | per share | |||||||
Second year | ||||||||
Dividend to preferred shareholders | ||||||||
Arrear in dividend (138000-92460)= | 45540 | |||||||
Dividend to preferred shareholders | 138,000 | |||||||
total dividend to preferred shareholders | 183540 | |||||||
dividend per share = | 183540/23000 | |||||||
7.98 | ||||||||
Dividend to common shareholders (193540-183540) | ||||||||
10000 | ||||||||
0.13 | ||||||||
Third year | ||||||||
dividend to preferred shareholders = 138000/23000 | ||||||||
6 | ||||||||
dividend to common shareholders = (240,940 - 138000)/77000 | ||||||||
1.34 | ||||||||
Fourth year | ||||||||
Dividend to preferred shareholders = $6 per share | ||||||||
dividend to common shareholders = (270,440-138000)/77000 | ||||||||
1.72 | ||||||||
preferred | Common | |||||||
dividend | dividend | |||||||
per share | per share | |||||||
First year | 4.02 | 0 | ||||||
second year | 7.98 | 0.13 | ||||||
third year | 6 | 1.34 | ||||||
Fourth year | 6 | 1.72 | ||||||