Question

National Furniture Company has 25,000 shares of cumulative preferred 2% stock, $75 par and 200,000 shares of $10 par common stock. The following amounts were distributed as dividends:

Year 1              $25,000

Year 2              $88,000

Year 3              $95,500

1. Calculate how much preferred dividends should be issued each year?

2. Determine the dividends per share for preferred and common stock for each year

                                                Year 1                        Year 2                        Year 3

Amount distributed:

   Preferred dividends                _________                    _________                    ________

   Common dividends                _________                    _________                    ________

Dividends Per share:

   Preferred dividends                _________                    _________                    _________

   Common Dividends                _________                    _________                    _________           

2. The following data are taken from Logi-Teck balance sheet by December 31, 2019

Cash	$154,000
Accounts receivable	210,000
Inventory	240,000
Prepaid expenses	15,000
Property, plant, and equipment	375,000
Accounts payable	245,000
Accrued liabilities	4,000
Income tax payable	10,000
Notes payable, short-term	85,000

Based upon the information, please calculate the following ratio. Round ratios to one decimal place.

(A) working capitals

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(B) current ratio

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(C) quick ratio

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Answer 1

1.

Working note:

2.