Question

the Edison Company own and operates coffe shops throughout middlesex county. Edison company has declared the following annual dividends over a six year period: year 1 80,000; year2; 90,000; year 3 150,000; year 5, 160,000; outstanding stock of the company was composed of 250,000 shares of cumulative, preferred 2% stock, $20 par and 500,000 shares of common stock, $15 par. complete the schedule showing the total dividend and the per share dividend on each class of stock for the period ended 12/31 of each year. there were no dividends in arrears at the beggining of year 1

Answer 1

Dividend paid per share:

Dividends paid ÷ No. of outstanding shares

	Preferred dividend Per share	Common Dividend Per share
Year 1	$0.32	$0
Year 2	$0.36	$0
Year 3	$0.52	$0.04
Year 4	$0.00	$0
Year 5	$0.64	$0

Assumed that dividends paid in Year 4 is $0 because No information given about Year 4.

Calculations:
Annual Preferred dividend:

	Par Value per Preferred Share	Dividend Ratio	Dividend per preferred share	Number of Preferred shares	Preferred Dividend
Annual Preferred Dividend:	$20	2.00%	$0.40	250,000	$100,000

Schedule showing the total dividend and the per share dividend on each class of stock for the period ended:

	Total cash Dividend Paid	Paid to Preferred	Paid to Common	Dividends in Arrears at year-end	Per share Dividend on Preferred	Per share Dividend on Common
	i	ii	iii=i-ii	iv=100,000-ii	v	vi=iii/500,000
Year 1	$80,000	$80,000		$20,000	$0.40
Year 2	$90,000	$90,000		$10,000	$0.40
Year 3	$150,000	$130,000	$20,000	$0	$0.40	$0.04
Year 4				$100,000	$0.40
Year 5	$160,000	$100,000	$160,000	$0	$0.40	$0