Question

Dividends Per Share

Windborn Company has 20,000 shares of cumulative preferred 2% stock, $150 par and 50,000 shares of $15 par common stock. The following amounts were distributed as dividends:

Year 1	$150,000
Year 2	30,000
Year 3	180,000

Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'.

	Preferred Stock (dividends per share)	Common Stock (dividends per share)
Year 1	$	$
Year 2	$	$
Year 3	$	$

Answer 1

• Requirement asked

	Preferred Dividend:		Common Stock Dividend:
		Dividend per share		Dividend per share
1st year		$               3.00		$               1.80
2nd year		$               1.50		$                   -
3rd year		$               4.50		$               1.80

• Workings

	Par Value per Preferred Share	Dividend rate	Dividend per Preferred Share	No. of Preferred Shares	Preferred Dividend
Annual Preferred Dividend:	$                        150	2.00%	$                   3.000	20,000	$            60,000.00
	Total Cash Dividend paid	Paid to Preferred	Paid to Common	Dividends in Arrears at Year end
Year 1	$          150,000.00	$           60,000.00	$           90,000.00	$                          -
Year 2	$            30,000.00	$           30,000.00	$                          -	$          30,000.00
Year 3	$          180,000.00	$           90,000.00	$           90,000.00	$                          -
TOTAL	$          360,000.00	$        180,000.00	$        180,000.00	$                          -

	Preferred Dividend:		Common Stock Dividend:
	Total	Dividend per share	Total	Dividend per share
1st year	$      60,000.00	$               3.00	$    90,000.00	$               1.80
2nd year	$      30,000.00	$               1.50	$                   -	$                   -
3rd year	$      90,000.00	$               4.50	$    90,000.00	$               1.80