Calgate Company had the following shares outstanding and retained earnings at the end of the current year: Preferred shares, 4% (par value $15; outstanding, 10,700 shares)$160,500Common shares (outstanding, 37,000 shares) 635,000Retained earnings 316,000 The board of directors is considering the distribution of a cash dividend to the two groups of shareholders. No dividends were declared during the previous two years. Three independent cases are assumed:Case A: The preferred shares are non-cumulative; the total amount of dividends is $52,400.Case B: The preferred shares are cumulative; the total amount of dividends is $67,000.Case C: Same as case B, except the amount is $99,500 1. Compute the amount of dividends, in total and per share, that would be payable to each class of shareholders for each case. (Round"Per share" to 2 decimal places.)CommonSharesPreferredSharesCase A:TotalPer shareCase B:TotalPer shareCase C:TotalPer share 2. Assume that the company issued a 10 percent common stock dividend on the outstanding common shares when the market valueper share was $25. Complete the following comparative schedule for common shares only. (Enter any decreases to account balanceswith a minus sign.)Amount of Dollar Increase (Decrease)ItemCash Dividend-Case CStock DividendAssetsLiabilitiesShareholders' equity

Cumulative Preference Share: When a corporation goes into liquidation, cumulative preference shares…

Answered: Calgate Company had the following…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter24: Analysis Of Financial Statements

Section: Chapter Questions

Problem 5CE

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Calgate Company had the following shares outstanding and retained earnings at the end of the current year:


Preferred shares, 4% (par value $15; outstanding, 10,700 shares)	$	160,500
Common shares (outstanding, 37,000 shares)		635,000
Retained earnings		316,000

The board of directors is considering the distribution of a cash dividend to the two groups of shareholders. No dividends were declared during the previous two years. Three independent cases are assumed:

Case A: The preferred shares are non-cumulative; the total amount of dividends is $52,400.
Case B: The preferred shares are cumulative; the total amount of dividends is $67,000.
Case C: Same as case B, except the amount is $99,500

1. Compute the amount of dividends, in total and per share, that would be payable to each class of shareholders for each case. (Round
"Per share" to 2 decimal places.)
Common
Shares
Preferred
Shares
Case A:
Total
Per share
Case B:
Total
Per share
Case C:
Total
Per share

2. Assume that the company issued a 10 percent common stock dividend on the outstanding common shares when the market value
per share was $25. Complete the following comparative schedule for common shares only. (Enter any decreases to account balances
with a minus sign.)
Amount of Dollar Increase (Decrease)
Item
Cash Dividend-Case C
Stock Dividend
Assets
Liabilities
Shareholders' equity

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