Question

York’s outstanding stock consists of 90,000 shares of 7.0% preferred stock with a $5 par value and also 160,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends:
  

2015 total cash dividends	$	19,800
2016 total cash dividends		29,500
2017 total cash dividends		285,000
2018 total cash dividends		435,000

rev: 11_29_2018_QC_CS-149901

Exercise 11-9 Dividends on common and cumulative preferred stock LO C2

Determine the amount of dividends paid each year to each of the two classes of stockholders assuming that the preferred stock is cumulative. Also determine the total dividends paid to each class for the four years combined. (Round your "Dividend per Preferred Share" answers to 3 decimal places.)

Answer 1

• Requirement asked

	Par Value per Preferred Share	Dividend rate	Dividend per Preferred Share	No. of Preferred Shares	Preferred Dividend
Annual Preferred Dividend:	$                             5	7.00%	$                   0.350	90,000	$            31,500.00
	Total Cash Dividend paid	Paid to Preferred	Paid to Common	Dividends in Arrears at Year end
2015	$            19,800.00	$           19,800.00	$                          -	$          11,700.00 [31500 – 19800]
2016	$            29,500.00	$           29,500.00	$                          -	$          13,700.00 [31500 + 31500 – 19800 – 29500]
2017	$          285,000.00	$           45,200.00 [13700 + 31500]	$        239,800.00	$                          -
2018	$          435,000.00	$           31,500.00	$        403,500.00	$                          -
TOTAL	$          769,300.00	$        126,000.00	$        643,300.00	$                          -