2. Analyzing Cash Dividends on Preferred and Common Stock Potter Company has outstanding 10,000 shares of $50 par value, 6% preferred stock and 80,000 shares of $5 par value common stock. During its first three years in business, it declared and paid no cash dividends in the first year, $240,000 in the second year, and $100,000 in the third year. a) If the preferred stock is cumulative, determine the total amount of cash dividends paid to each class of stock in each of the three years. Preferred Stock Common Stock Dividend Dividend Year 1 Year 2 Year 3 Show your calculations: (b) If the preferred stock is noncumulative, determine the total amount of cash dividends paid to each class of stock in each of the three years. Preferred Stock Common Stock Dividend Dividend Year 1 Year 2 Year 3 Show your calculations:

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 12RE: Given the following year-end information, compute Greenwood Corporations basic and diluted earnings...
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2. Analyzing Cash Dividends on Preferred and Common Stock
Potter Company has outstanding 10,000 shares of $50 par value, 6%
preferred stock and 80,000 shares of $5 par value common stock.
During its first three years in business, it declared and paid no cash
dividends in the first year, $240,000 in the second year, and $100,000
in the third year.
a) If the preferred stock is cumulative, determine the total amount of
cash dividends paid to each class of stock in each of the three years.
Preferred Stock
Common Stock
Dividend
Dividend
Year 1
Year 2
Year 3
Show your calculations:
(b) If the preferred stock is noncumulative, determine the total amount
of cash dividends paid to each class of stock in each of the three years.
Preferred Stock
Common Stock
Dividend
Dividend
Year 1
Year 2
Year 3
Show your calculations:
Transcribed Image Text:2. Analyzing Cash Dividends on Preferred and Common Stock Potter Company has outstanding 10,000 shares of $50 par value, 6% preferred stock and 80,000 shares of $5 par value common stock. During its first three years in business, it declared and paid no cash dividends in the first year, $240,000 in the second year, and $100,000 in the third year. a) If the preferred stock is cumulative, determine the total amount of cash dividends paid to each class of stock in each of the three years. Preferred Stock Common Stock Dividend Dividend Year 1 Year 2 Year 3 Show your calculations: (b) If the preferred stock is noncumulative, determine the total amount of cash dividends paid to each class of stock in each of the three years. Preferred Stock Common Stock Dividend Dividend Year 1 Year 2 Year 3 Show your calculations:
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