Concept explainers
1.
Cash dividends: The amount of cash provided by a corporation out of its distributable profits to its shareholders as a return for the amount invested by them is referred as cash dividends.
Common stock: These are the ordinary shares that a corporation issues to the investors in order to raise funds. In return, the investors receive a share of profit from the profits earned by the corporation. The dividend payments are not guaranteed and are paid after the payment made to the preferred stockholders.
Preferred stock: The stock that provides a fixed amount of return (dividend) to its stockholder before paying dividends to common stockholders is referred as preferred stock.
A preferred stock may be cumulative and non-cumulative. A cumulative preferred stock implies that a preferred stockholder is entitled to receive dividends for the current year plus any unpaid dividends of the previous years, before the dividends paid to the common stockholders.
Dividend per share:
Dividend per share represents the amount of dividend paid to each shareholders of the business.
To determine: The total dividends and the amount of dividends declared per share for preferred and common stock for each of the six years.
2.
The average annual dividend per share for each class of stock for the six-year period.
3.
The average annual percentage return on initial stockholders’ investment, based on the average annual dividend per share for (A) preferred stock and (B) common stock.
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- Longmont Corporation earned net income of $90,000 this year. The company began the year with 600 shares of common stock and issued 500 more on April 1. They issued $5,000 in preferred dividends for the year. What is the numerator of the EPS calculation for Longmont?arrow_forwardErrol Corporation earned net income of $200,000 this year. The company began the year with 10,000 shares of common stock and issued 5,000 more on April 1. They issued $7,500 in preferred dividends for the year. What is the numerator of the EPS calculation for Errol?arrow_forwardDividends on preferred and common stock Yosemite Bike Corp. manufactures mountain bikes and distributes them through retail outlets in California, Oregon, and Washington. Yosemite Bike has declared the following annual dividends over a six-year period ended December 31 of each year: 20Y1, $24,000; 20Y2, $8,750; 20Y3, $127,250; 20Y4, $100,000; 20Y5, $115,000; and 20Y6, $ During the entire period, the outstanding stock of the company was composed of 25,000 shares of cumulative preferred 2% stock, $90 par, and 100,000 shares of common stock, $4 par. Required: 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of 20Y1. Summarize the data in tabular form. If required, round your per share answers to two decimal places. If the amount is zero, please enter "0". Common Dividends Total Common Dividends Per Share Year 20Y1 20Y2 20Y3 20Y4 20Y5 20Y6 Total Dividends $24,000 8,750…arrow_forward
- Dividends on Preferred and Common Stock Yukon Bike Corp. manufactures mountain bikes and distributes them through retail outlets in Canada, Montana, Idaho, Oregon, and Washington. Yukon Bike Corp. declared the following annual dividends over a six-year period ending December 31 of each year: Year 1, $40,000; Year 2, $50,000; Year 3, $80,000; Year 4, $230,000; Year 5, $280,000; and Year 6, $360,000. During the entire period, the outstanding stock of the company was composed of 25,000 shares of 4% preferred stock, $100 par, and 100,000 shares of common stock, $5 par. Instructions: 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. Assume that preferred dividends are paid before any common dividends. If required, round your answers to the nearest cent. If the amount is zero, please enter "0". Preferred Dividends Common Dividends Year Total Dividends Total Per Share Total Per…arrow_forwardDividends on Preferred and Common Stock Yosemite Bike Corp. manufactures mountain bikes and distributes them through retail outlets in California, Oregon, and Washington. Yosemite Bike has declared the following annual dividends over a six-year period ended December 31 of each year: 20Y1, $24,250; 20Y2, $9,250; 20Y3, $106,500; 20Y4, $90,000; 20Y5, $115,000; and 20Y6, $165,000. During the entire period, the outstanding stock of the company was composed of 25,000 shares of cumulative preferred 2% stock, $80 par, and 100,000 shares of common stock, $4 par. Required: 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of 20Y1. Summarize the data in tabular form. If required, round your per share answers to two decimal places. If the amount is zero, please enter "0".arrow_forwardDividends on Preferred and Common Stock Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: Year 1, $24,000; Year 2, $72,000; Year 3, $108,000; Year 4, $138,000; Year 5, $168,000; and Year 6, $216,000. During the entire period ending December 31 of each year, the outstanding stock of the company was composed of 20,000 shares of cumulative, 3% preferred stock, $100 par, and 100,000 shares of common stock, $5 par. Required: 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in ге arrears at the beginning of Year 1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0". Preferred Dividends Common Dividends Total Year Dividends Total Per Share Total Per Share $ 24,000 24,000 v 1.20 V Year 1 Year 2 72,000 72,000…arrow_forward
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- Dividends on Preferred and Common Stock Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: Year 1, $48,000; Year 2, $144,000; Year 3, $228,000; Year 4, $264,000; Year 5, $336,000; and Year 6, $420,000. During the entire period ending December 31 of each year, the outstanding stock of the company was composed of 30,000 shares of cumulative, 4% preferred stock, $100 par, and 100,000 shares of common stock, $10 par. Required: 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of Year 1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0". Preferred Dividends Common Dividends Year TotalDividends Total Per Share Total Per Share Year 1 $ 48,000 $fill in the…arrow_forwardDividends on Preferred and Common Stock Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: Year 1, $24,000; Year 2, $72,000; Year 3, $108,000; Year 4, $132,000; Year 5, $174,000; and Year 6, $210,000. During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 20,000 shares of cumulative, 3% preferred stock, $100 par, and 100,000 shares of common stock, $5 par. Required: 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of Year 1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0". Preferred Dividends Common Dividends Year TotalDividends Total Per Share Total Per Share Year 1 $ 24,000 $fill in the…arrow_forwardThe following equity investment transactions were completed by Vintage Company during a recent year: Apr. 10. Purchased 2,300 shares of Delew Company’s common stock for a price of $49.85 per share plus a brokerage commission of $345. Delew Company has 260,000 shares of common stock outstanding. July 8. Received a quarterly dividend of $0.25 per share on the Delew Company investment. Sept. 10. Sold 1,500 shares for a price of $45 per share less a brokerage commission of $190. Dec. 31. At the end of the accounting period, the fair value of the remaining 800 shares of Delew Company’s stock was $49.50 per share. Journalize the entries for these transactions. If an amount box does not require an entry, leave it blank. If required, round the final answers to the nearest dollar. Apr. 10 - Purchase Investments-Delew Company Stock Cash July 8 - Dividend Cash Dividend Revenue Sept. 10 - Sale Cash Loss on Sale of Investments…arrow_forward
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College