Chicago Company reported the following information at the end of the current year: Common stock ( $10 par value; 37,000 shares outstanding) $ 370,000 Preferred stock, 10% ( $10 par value; 8,200 shares outstanding) 82,000 Retained earnings 282,000 The board of directors is considering the distribution of a cash dividend to the two groups of stockholders. No dividends were declared during the previous two years. Assume the three cases below are independent of each other. Case A: The preferred stock is noncumulative; the total amount of all dividends is $32,000. Case B: The preferred stock is cumulative; the total amount of all dividends is $24,600. Case C: The preferred stock is cumulative; the total amount of all dividends is $90,200 . Required: 1. Compute the amount of dividends, in total and per share, that would be payable to each class of stockholders for each case. (Round "Dividends per Share" to 2 decimal places.) * I am unsure why Dividends per share on Case A Preferred and Case C common are incorrect. See pic 1 2. Assume Chicago Company issued a 30 percent common stock dividend on the outstanding shares when the market value per share was $24. Fill in the table below to show how this stock dividend would compare to Case C. (Leave no cells blank - be certain to enter "0" wherever required.) * I'm unsure why liabilites and Stock dividend are incorrect. See pic 2

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 79E: Ratio Analysis MJO Inc. has the following stockholders equity section of the balance sheet: On the...

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Chicago Company reported the following information at the end of the current year:


Common stock ( $10 par value; 37,000 shares outstanding)	$	370,000
Preferred stock, 10% ( $10 par value; 8,200 shares outstanding)		82,000
Retained earnings		282,000

The board of directors is considering the distribution of a cash dividend to the two groups of stockholders. No dividends were declared during the previous two years. Assume the three cases below are independent of each other.

Case A: The preferred stock is noncumulative; the total amount of all dividends is $32,000.

Case B: The preferred stock is cumulative; the total amount of all dividends is $24,600.

Case C: The preferred stock is cumulative; the total amount of all dividends is $90,200 .

Required:

1. Compute the amount of dividends, in total and per share, that would be payable to each class of stockholders for each case. (Round "Dividends per Share" to 2 decimal places.)

* I am unsure why Dividends per share on Case A Preferred and Case C common are incorrect. See pic 1

2. Assume Chicago Company issued a 30 percent common stock dividend on the outstanding shares when the market value per share was $24. Fill in the table below to show how this stock dividend would compare to Case C. (Leave no cells blank - be certain to enter "0" wherever required.)

* I'm unsure why liabilites and Stock dividend are incorrect. See pic 2

Required:
1. Compute the amount of dividends, in total and per share, that would be payable to each class of stockholders for each case.
(Round "Dividends per Share" to 2 decimal places.)
X Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Assume Chicago Company issued a 30 percent common stock dividend on the outstanding shares when the market value per
share was $24. Fill in the table below to show how this stock dividend would compare to Case C. (Leave no cells blank - be
certain to enter "0" wherever required.)
AMOUNT OF DOLLAR INCREASE (DECREASE)
Item
Cash Dividend-Case C
Stock Dividend
Assets
90,200
Decrease
$
No effect
Liabilities
90,200
Increase
No effect
Stockholders' equity
$
90,200
Decrease
$
157,440 X No effect
< Required 1
Required 2 >

x Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Assume Chicago Company issued a 30 percent common stock dividend on the outstanding shares when the market value
share was $24. Fill in the table below to show how this stock dividend would compare to Case C. (Leave no cells blank
certain to enter "0" wherever required.)
-
AMOUNT OF DOLLAR INCREASE (DECREASE)
Item
Cash Dividend-Case C
Stock Dividend
Assets
$
90,200
Decrease
$
No effect
Liabilities
$
90,200 X Increase
No effect
Stockholders' equity
$
90,200
Decrease
$
157,440 X No effect
< Required 1
Required 2
%24

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