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Matt Schmidt Company's ledger shows the following balances on December 31, 2020. 7% Preferred stock—$10 par value, outstanding 20,000 shares 000 $ 200,000 Common stock—$100 par value, outstanding 30,000 shares 3,000,000 Retained earnings 630,000 Instructions Assuming that the directors decide to declare total dividends in the amount of $366,000, determine how much each class of stock should receive under each of the conditions stated below. One year's dividends are in arrears on the preferred stock. a.    The preferred stock is cumulative and fully participating. b.    The preferred stock is noncumulative and nonparticipating. c.    The preferred stock is noncumulative and is participating in distributions in excess of a 10% dividend rate on the common stock.

Matt Schmidt Company's ledger shows the following balances on December 31, 2020. 7% Preferred stock—$10 par value, outstanding 20,000 shares 000 $ 200,000 Common stock—$100 par value, outstanding 30,000 shares 3,000,000 Retained earnings 630,000 Instructions Assuming that the directors decide to declare total dividends in the amount of $366,000, determine how much each class of stock should receive under each of the conditions stated below. One year's dividends are in arrears on the preferred stock. a.    The preferred stock is cumulative and fully participating. b.    The preferred stock is noncumulative and nonparticipating. c.    The preferred stock is noncumulative and is participating in distributions in excess of a 10% dividend rate on the common stock.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 24E
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Matt Schmidt Company's ledger shows the following balances on December 31, 2020.

7% Preferred stock—$10 par value, outstanding 20,000 shares
000
$ 200,000
Common stock—$100 par value, outstanding 30,000 shares
3,000,000
Retained earnings
630,000

Instructions

Assuming that the directors decide to declare total dividends in the amount of $366,000, determine how much each class of stock should receive under each of the conditions stated below. One year's dividends are in arrears on the preferred stock.

a.    The preferred stock is cumulative and fully participating.

b.    The preferred stock is noncumulative and nonparticipating.

c.    The preferred stock is noncumulative and is participating in distributions in excess of a 10% dividend rate on the common stock.

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