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Michelangelo Inc., a software development firm, has stock outstanding as follows: 10,000 shares of cumulative 3%,...

Michelangelo Inc., a software development firm, has stock outstanding as follows: 10,000 shares of cumulative 3%, preferred stock of $20 par, and 13,000 shares of $50 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $2,300; second year, $3,200; third year, $23,030; fourth year, $41,750. 1st Year 2nd Year 3rd Year 4th Year Preferred stock (dividend per share) $ $ $ $ Common stock (dividend per share) $ $ $ $

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Statementshowing Computations
Paticulars 1 st year 2nd year 3rd year 4th year
Total Dividend Paid               2,300.00                3,200.00                 23,030.00                     41,750.00
Preference Dividend to be paid = 10,000*20*3%               6,000.00                6,000.00                    6,000.00                       6,000.00
Preference Dividend Paid = Existing + arrears               2,300.00                3,200.00                 12,500.00                       6,000.00
Dividend available for common stock                            -                               -                   10,530.00                     35,750.00
Arrears of preference Dividend               3,700.00                6,500.00                                 -                                      -  
Preferred stock (dividend per share)                       0.23                        0.32                            1.25                               0.60
Common stock (dividend per share)                              0.81                               2.75

ekkarill92 answered 2 years ago
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