Question

A company had stock outstanding as follows during each of its first three years of operations: 3,000 shares of 7%, $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.

year 1 15750

year 2 21000

year 3 27860

Answer 1

• Requirement asked

	1st year	2nd year	3rd year
Preferred Dividend:
Total	$              15,750.00	$          21,000.00	$         26,250.00
Dividend per share	$                         5.25	$                    7.00	$                   8.75
Common Stock Dividend:
Total	$                              -	$                         -	$           1,610.00
Dividend per share	$                              -	$                         -	$                   0.05

	Preferred Dividend:		Common Stock Dividend:
	Total	Dividend per share	Total	Dividend per share
1st year	$      15,750.00	$                             5.25	$                   -	$                                  -
2nd year	$      21,000.00	$                             7.00	$                   -	$                                  -
3rd year	$      26,250.00	$                             8.75	$      1,610.00	$                             0.05

• Working

	Par Value per Preferred Share	Dividend rate	Dividend per Preferred Share	No. of Preferred Shares	Preferred Dividend
Annual Preferred Dividend:	$                  100.00	7.00%	$                   7.000	3,000	$            21,000.00
	Total Cash Dividend paid	Paid to Preferred	Paid to Common	Dividends in Arrears at Year end
Year 1	$            15,750.00	$           15,750.00	$                          -	$             5,250.00
Year 2	$            21,000.00	$          21,000.00	$                          -	$             5,250.00
Year 3	$            27,860.00	$           26,250.00	$             1,610.00	$                          -