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Assume that the records of Ardell Consulting show the following balances in the stockholders' equity accounts on December 31, 2020: Common Stock, par of $1 per share and 30,000 shares outstanding 5% Preferred Stock, par of $50 per share and 20,000 shares outstanding Ardell has no dividends in arrears as of January 1, 2018 and pays no dividends in 2018 or 2019. On December 31, 2020, the board of directors declares a total cash dividend distribution of $500,000, which will be paid to investors on January 15, 2021. a) If the preferred stock is noncumulative, how will the distribution be allocated between the common stockholders and preferred stockholders? Common shareholders will receive: Preferred shareholders will receive: b) If the preferred stock is cumulative, how will the distribution be allocated between the common stockholders and preferred stockholders? Common shareholders will receive: Preferred shareholders will receive: I3D %24

Assume that the records of Ardell Consulting show the following balances in the stockholders' equity accounts on December 31, 2020: Common Stock, par of $1 per share and 30,000 shares outstanding 5% Preferred Stock, par of $50 per share and 20,000 shares outstanding Ardell has no dividends in arrears as of January 1, 2018 and pays no dividends in 2018 or 2019. On December 31, 2020, the board of directors declares a total cash dividend distribution of $500,000, which will be paid to investors on January 15, 2021. a) If the preferred stock is noncumulative, how will the distribution be allocated between the common stockholders and preferred stockholders? Common shareholders will receive: Preferred shareholders will receive: b) If the preferred stock is cumulative, how will the distribution be allocated between the common stockholders and preferred stockholders? Common shareholders will receive: Preferred shareholders will receive: I3D %24

Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter12: Corporations: Organization, Stock Transactions, And Dividends
Section: Chapter Questions
Problem 22E: Statement of stockholders equity The stockholders equity T accounts of I-Cards Inc. for the year...
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3M CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In millions) Accumulated Additional Other Total Common Paid-in Treasury Retained Comprehensive Stockholders' Stock Capital $ 4,295 Stock Equity $ 11,622 Earnings Income Balance, December 31, 2017 $ 9 $ (23,572) $ 38,699 (7,809) Net income 5,363 5,363 Stock issued 485 485 Stock-based compensation 302 302 Stock repurchased (4,870) (4,870) (3,193) (23) Cash dividends (3,193) Currency & pension adjustments (23) Other, net 162 162 Balance, December 31, 2018 $ 9 $ 5,082 $ (28,442) $ 40,869 $ (7,670) $ 9,848 Net income 4,582 4,582 Stock issued 547 547 Stock-based compensation 278 278 Stock repurchased (1,407) (1,407) Cash dividends (3,316) (3,316) Currency & pension adjustments (349) (349) Other, net (57) (57) Balance, December 31, 2019 $ 9 $ 5,907 $ (29,849) $ 42,135 $ (8,076) $ 10,126
Transcribed Image Text:3M CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In millions) Accumulated Additional Other Total Common Paid-in Treasury Retained Comprehensive Stockholders' Stock Capital $ 4,295 Stock Equity $ 11,622 Earnings Income Balance, December 31, 2017 $ 9 $ (23,572) $ 38,699 (7,809) Net income 5,363 5,363 Stock issued 485 485 Stock-based compensation 302 302 Stock repurchased (4,870) (4,870) (3,193) (23) Cash dividends (3,193) Currency & pension adjustments (23) Other, net 162 162 Balance, December 31, 2018 $ 9 $ 5,082 $ (28,442) $ 40,869 $ (7,670) $ 9,848 Net income 4,582 4,582 Stock issued 547 547 Stock-based compensation 278 278 Stock repurchased (1,407) (1,407) Cash dividends (3,316) (3,316) Currency & pension adjustments (349) (349) Other, net (57) (57) Balance, December 31, 2019 $ 9 $ 5,907 $ (29,849) $ 42,135 $ (8,076) $ 10,126
Assume that the records of Ardell Consulting show the following balances in the stockholders' equity accounts on December 31, 2020: Common Stock, par of $1 per share and 30,000 shares outstanding 5% Preferred Stock, par of $50 per share and 20,000 shares outstanding Ardell has no dividends in arrears as of January 1, 2018 and pays no dividends in 2018 or 2019. On December 31, 2020, the board of directors declares a total cash dividend distribution of $500,000, which will be paid to investors on January 15, 2021. a) If the preferred stock is noncumulative, how will the distribution be allocated between the common stockholders and preferred stockholders? Common shareholders will receive: Preferred shareholders will receive: b) If the preferred stock is cumulative, how will the distribution be allocated between the common stockholders and preferred stockholders? Common shareholders will receive: Preferred shareholders will receive:
Transcribed Image Text:Assume that the records of Ardell Consulting show the following balances in the stockholders' equity accounts on December 31, 2020: Common Stock, par of $1 per share and 30,000 shares outstanding 5% Preferred Stock, par of $50 per share and 20,000 shares outstanding Ardell has no dividends in arrears as of January 1, 2018 and pays no dividends in 2018 or 2019. On December 31, 2020, the board of directors declares a total cash dividend distribution of $500,000, which will be paid to investors on January 15, 2021. a) If the preferred stock is noncumulative, how will the distribution be allocated between the common stockholders and preferred stockholders? Common shareholders will receive: Preferred shareholders will receive: b) If the preferred stock is cumulative, how will the distribution be allocated between the common stockholders and preferred stockholders? Common shareholders will receive: Preferred shareholders will receive:
Expert Solution
Step 1

a) If the preferred stock is noncumulative, the distribution will be allocated as:

Common shareholders will receive =$500,000-$50,000=$450,000
Preferred shareholders will receive =$50×5%×20,000=$50,000

 

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