Common stock ($10 par value; 48,000 shares outstanding) Preferred stock, 15% ($15 par value; 9,500 shares outstanding) Retained earnings 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 $38,500. Case B: The preferred stock is cumulative; the total amount of all dividends is $64,125. Case C: The preferred stock is cumulative; the total amount of all dividends is $91,500. Required: 1. Compute the amount of dividends, in total and per share, that would be payable to each class of stockholders for each case. 2. Assume Chicago Company issued a 15 percent common stock dividend on the outstanding shares when the market value per share was $39. Fill in the table below to show how the stock dividend and Case C would affect Total Assets, Liabilities, and Stockholders' equity. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the amount of dividends, in total and per share, that would be payable to each class of stockholders for each case. Note: Round "Dividends per Share" to 2 decimal places. Case A Case B Case C Preferred Stock Dividends Common Stock Total $ 480,000 142,500 288,500 Dividends per Share Common Stock Preferred Stock Required 1 Required 2 > < Prev 7 of 8 www E Nex>
Common stock ($10 par value; 48,000 shares outstanding) Preferred stock, 15% ($15 par value; 9,500 shares outstanding) Retained earnings 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 $38,500. Case B: The preferred stock is cumulative; the total amount of all dividends is $64,125. Case C: The preferred stock is cumulative; the total amount of all dividends is $91,500. Required: 1. Compute the amount of dividends, in total and per share, that would be payable to each class of stockholders for each case. 2. Assume Chicago Company issued a 15 percent common stock dividend on the outstanding shares when the market value per share was $39. Fill in the table below to show how the stock dividend and Case C would affect Total Assets, Liabilities, and Stockholders' equity. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the amount of dividends, in total and per share, that would be payable to each class of stockholders for each case. Note: Round "Dividends per Share" to 2 decimal places. Case A Case B Case C Preferred Stock Dividends Common Stock Total $ 480,000 142,500 288,500 Dividends per Share Common Stock Preferred Stock Required 1 Required 2 > < Prev 7 of 8 www E Nex>
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter13: Corporations: Organization, Stock Transactions, And Dividends
Section: Chapter Questions
Problem 3PA: The following selected accounts appear in the ledger of EJ Construction Inc. at the beginning of the...
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Transcribed Image Text:Chicago Company reported the following information at the end of the current year:
Common stock ($10 par value; 48,000 shares outstanding)
Preferred stock, 15% ($15 par value; 9,500 shares outstanding)
Retained earnings
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 $38,500.
Case B: The preferred stock is cumulative; the total amount of all dividends is $64,125.
Case C: The preferred stock is cumulative; the total amount of all dividends is $91,500.
Required:
1. Compute the amount of dividends, in total and per share, that would be payable to each class of stockholders for each case.
2. Assume Chicago Company issued a 15 percent common stock dividend on the outstanding shares when the market value per
share was $39. Fill in the table below to show how the stock dividend and Case C would affect Total Assets, Liabilities, and
Stockholders' equity
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Compute the amount of dividends, in total and per share, that would be payable to each class of stockholders for each case.
Note: Round "Dividends per Share" to 2 decimal places.
Case A
Case B
Case C
Preferred
Stock
Dividends
Common
Stock
$ 480,000
142,500
288,500
Total
Dividends per Share
Preferred Common
Stock
Stock
Required 1
Required 2 >
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--
Nex>

Transcribed Image Text:Chicago Company reported the following information at the end of the current year:
Common stock ($10 par value; 48,000 shares outstanding)
Preferred stock, 15% ($15 par value; 9,500 shares outstanding)
Retained earnings
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 $38,500.
Case B: The preferred stock is cumulative; the total amount of all dividends is $64,125.
Case C: The preferred stock is cumulative; the total amount of all dividends is $91,500.
Required:
1. Compute the amount of dividends, in total and per share, that would be payable to each class of stockholders for each case.
2. Assume Chicago Company issued a 15 percent common stock dividend on the outstanding shares when the market value per
share was $39. Fill in the table below to show how the stock dividend and Case C would affect Total Assets, Liabilities, and
Stockholders' equity.
Complete this question by entering your answers in the tabs below.
Required 2
Assume Chicago Company issued a 15 percent common stock dividend on the outstanding shares when the market value per
share was $39. Fill in the table below to show how the stock dividend and Case C would affect Total Assets, Liabilities, and
Stockholders' equity.
Note: Leave no cells blank - be certain to enter "0" wherever required.
Required 1
Item
Total Assets
Total Liabilities
Total Stockholders' equity
$ 480,000
142,500
288,500
AMOUNT OF DOLLAR INCREASE (DECREASE)
Stock Dividend
Cash Dividend-Case C
< Required 1
Required 2 >
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