A. Calculate the dividends paid to the preferred stockholders. B. Calculate the dividends paid to the common stockholders.

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter14: Corporation Accounting
Section: Chapter Questions
Problem 12MC: A corporation issued 100 shares of $100 par value preferred stock for $150 per share. The resulting...
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Wedge Corporation has the following capital stock outstanding:
$1 par value common stock, 250,000 shares.
8% preferred stock, par $100, 5,000 shares, cumulative, with 2 years in arrears.
Cash dividends of $150,000 were declared and paid near the end of the current year.
Required:
A. Calculate the dividends paid to the preferred stockholders.
B. Calculate the dividends paid to the common stockholders.
Transcribed Image Text:Wedge Corporation has the following capital stock outstanding: $1 par value common stock, 250,000 shares. 8% preferred stock, par $100, 5,000 shares, cumulative, with 2 years in arrears. Cash dividends of $150,000 were declared and paid near the end of the current year. Required: A. Calculate the dividends paid to the preferred stockholders. B. Calculate the dividends paid to the common stockholders.
A. Preferred: (5,000 shares x $100 par x 8%) × 3 years = $120,000.
B. Common: Total dividends $150,000 – dividends to preferred stockholders $120,000 =
dividends paid to common stockholders $30,000.
Transcribed Image Text:A. Preferred: (5,000 shares x $100 par x 8%) × 3 years = $120,000. B. Common: Total dividends $150,000 – dividends to preferred stockholders $120,000 = dividends paid to common stockholders $30,000.
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