Question 19 - Calculate Dividends per share - (1)Using the information below calculate the dividends that each cumulative preferred and common stock shareholder are entitled to each year. (2) For each of the three years, calculate the dividends per share. CD Corporation has outstanding the following classes of stock: o 20,000 shares Cumulative Preferred 2% stock, $75 par o 70,000 shares Common Stock $40 par o Dividends distributed were the following o 2016 - $25,000 o 2017 - $15,000 o 2018 $200,000
Question 19 - Calculate Dividends per share - (1)Using the information below calculate the dividends that each cumulative preferred and common stock shareholder are entitled to each year. (2) For each of the three years, calculate the dividends per share. CD Corporation has outstanding the following classes of stock: o 20,000 shares Cumulative Preferred 2% stock, $75 par o 70,000 shares Common Stock $40 par o Dividends distributed were the following o 2016 - $25,000 o 2017 - $15,000 o 2018 $200,000
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter12: Corporations: Organization, Stock Transactions, And Dividends
Section: Chapter Questions
Problem 12.1BE
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Transcribed Image Text:Question 19 - Calculate Dividends per share (1)Using the information below
calculate the dividends that each cumulative preferred and common stock
shareholder are entitled to each year. (2) For each of the three years, calculate the
dividends per share.
CD Corporation has outstanding the following classes of stock:
o 20,000 shares Cumulative Preferred 2% stock, $75 par
o 70,000 shares - Common Stock $40 par
o Dividends distributed were the following
o 2016 - $25,000
o 2017 $15,000
o 2018 $200,000
Expert Solution
Step 1
Dividends are paid first to preferred stockholders and the remaining balance is paid to common stockholders.
Dividend arrears are paid to cumulative preferred stock.
Annual preferred dividend = 20,000*$75*2%
Annual preferred dividend = $30,000
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