In: Accounting
In each of the following independent cases, it is assumed that
the corporation has outstanding 20,000,...
In each of the following independent cases, it is assumed that
the corporation has outstanding 20,000, $0.80, preferred shares,
with a carrying value of $200,000, and 80,000 common shares, with a
carrying value of $800,000.
You must show your work. Clearly label your calculations, and
clearly label your answer and highlight it with bold print. Correct
answers without showing how you arrived at the solution will
receive only part marks.
Instructions
- Assume that the preferred dividends are cumulative and
non-participating, and preferred dividends are paid up to date
through 2019. At December 31, 2020, the board of directors wants to
distribute $125,000 in dividends. How much will the preferred
shareholders receive?
- Assume that the preferred dividends are cumulative and
non-participating. Although dividends have been paid regularly up
to 2017, no dividends were declared in 2018 or 2019. At December
31, 2020, the board of directors wants to distribute $200,000 in
dividends. How much will the preferred shareholders receive?
- Assume that the preferred dividends are cumulative and fully
participating. Although dividends have been paid regularly up to
2017, no dividends were declared in 2018 or 2019. At December 31,
2020, the board of directors wants to distribute $200,000 in
dividends. How much will the preferred shareholders receive?