Question

In: Accounting

Stockholders' Equity Paid-In Capital: Preferred Stock—4%, $12 Par Value; 150,000 shares authorized, 30,000 shares issued and...

Stockholders' Equity
Paid-In Capital:
Preferred Stock—4%, $12 Par Value; 150,000 shares
authorized, 30,000 shares issued and outstanding
$360,000
Common Stock—$3 Par Value; 575,000 shares
authorized, 330,000 shares issued and outstanding
990,000
Paid-In Capital in Excess of Par—Common
990,000
Total Paid-In Capital
2,340,000
Retained Earnings
140,000
Total Stockholders' Equity
$2,480,000

Requirement 1. Assuming the preferred stock is​ cumulative, compute the amount of dividends to preferred stockholders and to common stockholders for

2018

and

2019

if total dividends are

$13,400

in

2018

and

$46,000

in

20192019.

Assume no changes in preferred stock and common stock in

2019

​(Assume all preferred dividends have been paid prior to

2018

Complete all input boxes. Enter a​ "0" for zero amounts. For the current year preferred​ dividend, be sure to enter the calculated dividend on the​ "current year​ dividend" line and the paid out dividend on the​ "total dividend to preferred​ stockholders" line.)

SouthernSouthern​'s

2018

dividend would be divided between preferred and common stockholders in this​ manner:

Solutions

Expert Solution

2018

Preference dividend for year (360000*4%)

14400

But total dividend declared in 2018 is 13400. Remaining dividend (14400-13400 =1000) paid in future year because preferred stock are cumulative nature.

Total dividend declared of 13400 for preferred stock.

2019

Total dividend declared

46000

Less: dividend paid to preferred stock for year 2019 (360000*4%)

14400

Less: remaining dividend in 2018 for preferred stock

1000

Dividend declared for common stock holder

30600

2018

Dividend declared to preferred stock holder

13400

Total dividend declared in 2018

13400

2019

Dividend declared to preferred stock holder for year 2019

14400

Dividend declared to preferred stock holder for year 2018

1000

Total dividend for preferred stock holder

15400

Dividend declared for common stock holder

30600

Total dividend declared in 2019

46000


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