If the preference shares are cumulative and fully participating, how much is the dividends to be allocated to ordinary shareholders?2.If the preference shares of OTSO CORP are cumulative and participating only up to 15%, how much is the dividends to be allocated to ordinary shareholders? Use the following information in answering the next item(s):OTSO CORP. declared P1,500,000 cash dividends to its preference and ordinaryshareholders out of its unappropriated retained earnings in 2018. No dividends havebeen declared since 2016. OTSO's shareholders' equity before the dividend declarationis as follows:10% Preference share capital (P300 par)Ordinary share capital (150 par)Retained earningsOrdinary share premiumP3,000,0001,500,0004,000,000200,000

Formula: Dividends to common share holders = Total dividends - preferred dividends

If the preference shares are cumulative and fully participating, how much is the dividends to be allocated to ordinary shareholders? 2.If the preference shares of OTSO CORP are cumulative and participating only up to 15%, how much is the dividends to be allocated to ordinary shareholders?

If the preference shares are cumulative and fully participating, how much is the dividends to be allocated to ordinary shareholders? 2.If the preference shares of OTSO CORP are cumulative and participating only up to 15%, how much is the dividends to be allocated to ordinary shareholders?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

If the preference shares are cumulative and fully participating, how much is the dividends to be allocated to ordinary shareholders?

2.If the preference shares of OTSO CORP are cumulative and participating only up to 15%, how much is the dividends to be allocated to ordinary shareholders?

Use the following information in answering the next item(s):
OTSO CORP. declared P1,500,000 cash dividends to its preference and ordinary
shareholders out of its unappropriated retained earnings in 2018. No dividends have
been declared since 2016. OTSO's shareholders' equity before the dividend declaration
is as follows:
10% Preference share capital (P300 par)
Ordinary share capital (150 par)
Retained earnings
Ordinary share premium
P3,000,000
1,500,000
4,000,000
200,000

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.

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