When Crossett Corporation was organized in January, Year 1, it immediately issued 4,100 shares of $51 par, 5 percent, cumulative preferred stock and 11,500 shares of $7 par common stock. Its earnings history is as follows: Year 1, net loss of $15,000; Year 2, net income of $124,000; Year 3, net income of $223,000. The corporation did not pay a dividend in Year 1. Required a. How much is the dividend arrearage as of January 1, Year 2? b. Assume that the board of directors declares a $54,500 cash dividend at the end of Year 2 (remember that the Year 1 and Year 2 preferred dividends are due). How will the dividend be divided between the preferred and common stockholders? Complete this question by entering your answers in the tabs below. Required A Required B Assume that the board of directors declares a $54,500 cash dividend at the end of Year 2 (remember that the Year 1 and Year 2 preferred dividends are due). How will the dividend be divided between the preferred and common stockholders? Distributed to Shareholders Common Amount Preferred Total dividend declared Year 1 Arrearage 10,455 Year 2 Preferred dividends 10,455 10.455 Available for common Distributed to common Total distribution < Required A
When Crossett Corporation was organized in January, Year 1, it immediately issued 4,100 shares of $51 par, 5 percent, cumulative preferred stock and 11,500 shares of $7 par common stock. Its earnings history is as follows: Year 1, net loss of $15,000; Year 2, net income of $124,000; Year 3, net income of $223,000. The corporation did not pay a dividend in Year 1. Required a. How much is the dividend arrearage as of January 1, Year 2? b. Assume that the board of directors declares a $54,500 cash dividend at the end of Year 2 (remember that the Year 1 and Year 2 preferred dividends are due). How will the dividend be divided between the preferred and common stockholders? Complete this question by entering your answers in the tabs below. Required A Required B Assume that the board of directors declares a $54,500 cash dividend at the end of Year 2 (remember that the Year 1 and Year 2 preferred dividends are due). How will the dividend be divided between the preferred and common stockholders? Distributed to Shareholders Common Amount Preferred Total dividend declared Year 1 Arrearage 10,455 Year 2 Preferred dividends 10,455 10.455 Available for common Distributed to common Total distribution < Required A
Chapter14: Corporation Accounting
Section: Chapter Questions
Problem 9PA: Aggregate Mining Corporation was incorporated five years ago. It is authorized to issue 500,000...
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