Cullumber Holding's accounting records show the following balances on December 31, 2020. 12% Preferred stock-$100 par value, outstanding 19,000 shares $1,900,000 Common stock-$1 par value, outstanding 45,000 shares 45,000 Retained earnings 1,550,000 Assuming that the directors decide to declare total dividends in the amount of $500,000, determine how much each class of stock should receive under each of the conditions stated below. One year's dividends are in arrears on the preferred stock. (a) The preferred stock is cumulative and fully participating. (Round the rate of participation to 4 decimal places, eg.1.4278%. Round answers to O decimal places, e.g. $38,487.) Preferred (b) The preferred stock is noncumulative and nonparticipating. (Round answers to O decimal places, e.g. $38,487.) Preferred Common $ Common (c) The preferred stock is noncumulative and is participating in distributions in excess of a 12% dividend rate on the common stock. (Round the rate of participation to 4 decimal places, e.g.1.4278%. Round answers to O decimal places, e.g. $38,487.) Preferred Common
Cullumber Holding's accounting records show the following balances on December 31, 2020. 12% Preferred stock-$100 par value, outstanding 19,000 shares $1,900,000 Common stock-$1 par value, outstanding 45,000 shares 45,000 Retained earnings 1,550,000 Assuming that the directors decide to declare total dividends in the amount of $500,000, determine how much each class of stock should receive under each of the conditions stated below. One year's dividends are in arrears on the preferred stock. (a) The preferred stock is cumulative and fully participating. (Round the rate of participation to 4 decimal places, eg.1.4278%. Round answers to O decimal places, e.g. $38,487.) Preferred (b) The preferred stock is noncumulative and nonparticipating. (Round answers to O decimal places, e.g. $38,487.) Preferred Common $ Common (c) The preferred stock is noncumulative and is participating in distributions in excess of a 12% dividend rate on the common stock. (Round the rate of participation to 4 decimal places, e.g.1.4278%. Round answers to O decimal places, e.g. $38,487.) Preferred Common
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Cullumber Holding's accounting records show the following balances on December 31, 2020.
12% Preferred stock-$100 par value, outstanding 19,000 shares
Common stock-$1 par value, outstanding 45,000 shares
Retained earnings
Assuming that the directors decide to declare total dividends in the amount of $500,000, determine how much each class of stock
should receive under each of the conditions stated below. One year's dividends are in arrears on the preferred stock.
Preferred
(a) The preferred stock is cumulative and fully participating. (Round the rate of participation to 4 decimal places, e.g.1.4278%. Round
answers to O decimal places, e.g. $38,487.)
$
Preferred
Common
$1,900,000
(b) The preferred stock is noncumulative and nonparticipating. (Round answers to O decimal places, e.g. $38,487.)
$
45,000
Common
1,550,000
(c) The preferred stock is noncumulative and is participating in distributions in excess of a 12% dividend rate on the common stock.
(Round the rate of participation to 4 decimal places, e.g.1.4278 %. Round answers to O decimal places, e.g. $38,487.)
Preferred
Common](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fee006ef8-2a32-4271-be73-e6ac49bfb465%2F80274fe3-1bbe-443e-b637-b41ea2606f31%2Fsffqkco_processed.png&w=3840&q=75)
Transcribed Image Text:Cullumber Holding's accounting records show the following balances on December 31, 2020.
12% Preferred stock-$100 par value, outstanding 19,000 shares
Common stock-$1 par value, outstanding 45,000 shares
Retained earnings
Assuming that the directors decide to declare total dividends in the amount of $500,000, determine how much each class of stock
should receive under each of the conditions stated below. One year's dividends are in arrears on the preferred stock.
Preferred
(a) The preferred stock is cumulative and fully participating. (Round the rate of participation to 4 decimal places, e.g.1.4278%. Round
answers to O decimal places, e.g. $38,487.)
$
Preferred
Common
$1,900,000
(b) The preferred stock is noncumulative and nonparticipating. (Round answers to O decimal places, e.g. $38,487.)
$
45,000
Common
1,550,000
(c) The preferred stock is noncumulative and is participating in distributions in excess of a 12% dividend rate on the common stock.
(Round the rate of participation to 4 decimal places, e.g.1.4278 %. Round answers to O decimal places, e.g. $38,487.)
Preferred
Common
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