Answered: Distributed to Shareholders Amount…

Distributed to Shareholders Amount Preferred Common Total dividend declared Year 1 Arrearage Year 2 Preferred dividends Available for common Distributed to common Total distribution %24

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 38CE: Stockholder Payout Ratios The following information pertains to Milo Mindbender Corporation:...

See similar textbooks

Related questions

Q: Hanson Co. issued 10,000 shares of its $5 par common stock for $15 a share. In addition, it incurred…

A: Journal entry for recording issuance of shares is Debit Cash and Credit Common Stock and Credit…

Q: On November 25, Astoria Corporation issued 60,000 shares of its $5 par value common stock for $10…

A: The market value per share indicates the current selling price of the share. The face value or the…

Q: The outstanding capital stock of Bonita Corporation consists of 2,100 shares of $100 par value, 5%…

A: Preference shares can be of following types. Cumulative Preference Shares - These are the shares…

Q: The outstanding capital stock of Edna Millay Corporation consists of 2,000 shares of $100 par value,…

A: Cumulative preference shares means if the dividend is unpaid in one year, it is carried forward to…

Q: When Crossett Corporation was organized in January, Year 1, it immediately issued 4,500 shares of…

A: Dividend: Dividend is distributed to Share holders of the company. Share holders are the real owners…

Q: When Crossett Corporation was organized in January Year 1, it immediately issued 4,700 shares of $48…

A: Dividend Arrearage = Preference Share amount per share * No. of share preference shares issued *…

Q: If a corporation issues 1,000 shares of $1 par value common stock for $12,000, the journalentry…

A: Stock: It refers to a security issued in a form of certificate. It implies the right of ownership of…

Q: At the end of the prior annual reporting period, Barnard Corporation's balance sheet showed the…

A: Lets understand the basics.Stockholders Equity consist of the share which the shareholders has…

Q: The charter of a corporation provides for the issuance of 105,588 shares of common stock. Assume…

A: Dividend distribution is a method of distributing profit among the stockholder of the organization.…

Q: When Crossett Corporation was organized in January, Year 1, it immediately issued 4,500 shares of…

A: Dividend is to be distributed to the shareholders.First dividend is to be paid to the preferred…

Q: A corporation had the following transactions involving stock investments with insignificant…

A: A journal entry is a form of accounting entry that is used to report a business transaction in a…

Q: Hanson Co. issued 10,000 shares of its $5 par common stock for $15 a share. Assume the sale occurred…

A: Definition: Common stock: Common stock is the instrument used by the company for raising funds from…

Q: Hansen Inc. engaged in the following transactions during the current Hansen Inc. engaged in the…

A: Introduction: Journal: Recording of a business transactions in a chronological order. First step in…

Q: Patrick Inc. makes industrial solvents. In the first 4 months of the coming year, Patrick expects…

A: The budget is prepared to estimate the requirements for the period. The production budget is…

Q: The following selected transactions occurred for Corner Corporation: Feb. 1 Purchased 420…

A: Journal entries represent the starting point in the accounting cycle, they are used to record every…

Q: Bonita Corporation began business by issuing 633600 shares of $5 par value common stock for $30 per…

A: A balance sheet depicts a company's assets, liabilities, and shareholder's equity at a given point…

Q: Perry Corporation was established on January 1, Year 1 when it issued 21,800 shares of $50 par, 5…

A: To calculate the dividend to calculate the dividend paid to preferred stockholders at the end of…

Q: When Crossett Corporation was organized in January Year 1, it immediately issued 5,500 shares of $51…

A: Lets understand the basics.Shares are basically divided into two types which are,(1) Common stock(2)…

Q: Perry Corporation was established on January 1, Year 1 when it issued 21,700 shares of $50 par, 5…

A: The preference shareholders will have preferential right over the profits of the company the…

Q: Selected transactions completed by Primo Discount Corporation during the current fiscal year are as…

Q: During the year, the following selected transactions affecting stockholders' equity occurred for…

A: Introduction:- Journal entry is the first stage of accounting process. Journal entry used to record…

Q: Nasser Inc. had the following transactions pertaining to stock investments. Jan. 1 Purchased…

A: Journal Entry refers to the first step in the accounting cycle. It is used to record all the…

Q: When Crossett Corporation was organized in January Year 1, it immediately issued 5,500 shares of $51…

A: Dividend is defined as the distribution of profits made by a corporation to its preferred and common…

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

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

Q: Colgate Company had the following shares outstanding and retained earnings at the end of the current…

A: The objective of the question is to calculate the amount of dividends payable to each class of…

Q: The charter of a corporation provides for the issuance of 106,898 shares of common stock. Assume…

A: No. of shares issued ansd outstanding = No. of shares originally issued - No. of shares reacquired =…

Q: On January 1, 20--, Dover Company’s retained earnings accounts had the following balances:…

A: S.No Account Titles Debit Credit 5-Apr Cash Dividend Dr. ($0.30*5000 + $0.40*30000)…

Q: On 1 January 20X8 a company purchased 40,000 $1 listed equity shares at a price of $3 per share. An…

A: We have the following information: On 1 January 20X8 a company purchased 40,000 $1 listed equity…

Q: When Crossett Corporation was organized in January, Year 1, it immediately issued 5,500 shares of…

A: Dividend is the reward given to the shareholders in the form of shares, cash or other.The dividend…

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

A: Answer - Cumulative Preference Share - Cumulative preference shares are those type of shares that…

Q: The charter of a corporation provides for the issuance of 94,560 shares of common stock. Assume that…

A: Total amount of dividends paid = No. of shares outstanding * Dividends per shares

Q: The charter of a corporation provides for the issuance of 108,244 shares of common stock. Assume…

A: Originally issued shares = 44,779 shares (-) Reacquired shares = 4,084 shares Total dividend to be…

Q: The outstanding capital stock of Metlock Corporation consists of 1,900 shares of $100 par value, 9%…

A: Out of the profit earned by the business organizations, some of the profit is distributed to the…

Q: The outstanding share capital of KTI Corporation consists of 2,950 preferred shares and 7,000 common…

A: Non-cumulative preferred shares provide preferred shareholders the right to only the current year's…

Q: LLA, Inc, was capitalized through the issuance of 10,000 shares of $30 par common stock that was…

A: Shareholders Equity = Common stock capital + retained earnings Retained earnings = Net income for…

Q: that the company has retained earnings of $89,500, all of which is to be paid out in dividends, and…

A: Common shares: These shareholders are known as owners of the company and have voting rights. These…

Q: n stock, 80,100 shares at $1 par $ 80,100 Paid-in capital—excess of par 168,210 Retained…

A: Event Account title Debit Credit 1 Common stock a/c Dr. $1,100 Paid in capital in excess of…

Q: When incorporated Y Ltd. Issued 2,000 common shares to A for dollar 2,000. In year 2, Y Ltd. issued…

A: The paid up capital is defined as the component of called up capital that is actually reimbursed…

Concept explainers

Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.

Question

When Crossett Corporation was organized in January Year 1, it immediately issued 4,700 shares of $48 par, 8 percent, cumulative preferred stock and 12,000 shares of $8 par common stock. Its earnings history is as follows: Year 1, net loss of $12,700; Year 2, net income of $58,700; Year 3, net income of $119,700. The corporation did not pay a dividend in Year 1.

b. Assume that the board of directors declares a $55,596 cash dividend at the end of Year 2 (remember that the Year 1 and Year 2 preferred dividends are due). How will the dividend be divided between the preferred and common stockholders? (Amounts to be deducted should be indicated with minus sign.)

Distributed to
Shareholders
Amount
Preferred
Common
Total dividend declared
Year 1 Arrearage
Year 2 Preferred dividends
Available for common
Distributed to common
Total distribution
%24

Definition Definition Type of stock which is granted priority over dividend distributions as compared to common stockholders. Preferred stocks also do not carry any voting rights. Notably, in a case where a company is going to be liquidated, preferred stockholders have a priority claim on the value of assets of the company as quoted in the balance sheet, as compared to the common stockholders.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

How are dividends per share for common stock used in the calculation of the following? O A. O B. O c. OD. Dividends per share payout ratio Numerator Numerator Denominator Denominator Earnings per share Numerator Not used Not used Denominator
Question Content Area The price-earnings ratio on common stock is computed as a. dividends per share of common stock divided by earnings per share on common stock b. market price per share of common stock divided by earnings per share on common stock c. earnings per share of common stock divided by market price per share of common stock d. market price per share of common stock divided by dividends per share of common stock
Preference share that is given a right to share with the ordinary share in dividends in excess of a stated dividend rate is said to be * a. cumulative b. participating c. non cumulative d. non participating
Stockholder Payout Ratios The following information pertains to Milo Mindbender Corporation: Required: Calculate the dividend yield, dividend payout, and total payout. (Note: Round answers to two decimal places.)
Ratio Analysis Consider the following information. Required: Calculate the stockholder payout ratios. (Note: Round answers to two decimal places.) Calculate the stockholder profitability ratios. (Note: Round answers to two decimal places.)
Dividends in arrears on preference shares are reported in the financial statements as a (an) a. liabilityb. reduction from Retained Earningsc. reduction from Retained Earningsd. expense
#31 Complete the statement: Preference share that has a claim on any prior year dividends that may have passed is ______. Group of answer choices Non-cumulative Participating Cumulative Non-participating
help
The following are investor ‘ratios except: EPS P/E Ratio Dividend cover ROCE
a. Times interest earned ratio times b. Earnings per share on common stock c. Price-earnings ratio d. Dividends per share of common stock e. Dividend yield % %24
The common stock received from the new company is recorded at ...... Select one: a. Average value b. Face value c. Market value d. Exist Value
Dividend per share is Select one: O the earning per share multiplied by the retention rate O the earning per share multiplied by the YTM O the net income divided by the dividend payout ratio O the earning per share multiplied by the dividend payout ratio