Macy Company has 10,000 shares of 2% cumulative preferred stock of $50 par and 25,000 shares of $75 par common stock. The following amounts were distributed as dividends: $30,000 $6,000 Year 1 Year 2 Year 3 $80,000 Required: Determine the dividends per share for preferred and common stock for each year.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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**Macy Company's Dividend Distribution Analysis**

Macy Company has issued 10,000 shares of 2% cumulative preferred stock with a par value of $50, and 25,000 shares of common stock with a par value of $75. The following dividend distributions occurred over a three-year period:

- **Year 1**: $30,000
- **Year 2**: $6,000
- **Year 3**: $80,000

**Objective:**

Calculate the dividends per share for both preferred and common stock for each year. 

The problem requires understanding the distribution of dividends between preferred and common shareholders, particularly focusing on the cumulative nature of preferred stock, which entails paying out previous unpaid dividends before any dividends are distributed to common shareholders.
Transcribed Image Text:**Macy Company's Dividend Distribution Analysis** Macy Company has issued 10,000 shares of 2% cumulative preferred stock with a par value of $50, and 25,000 shares of common stock with a par value of $75. The following dividend distributions occurred over a three-year period: - **Year 1**: $30,000 - **Year 2**: $6,000 - **Year 3**: $80,000 **Objective:** Calculate the dividends per share for both preferred and common stock for each year. The problem requires understanding the distribution of dividends between preferred and common shareholders, particularly focusing on the cumulative nature of preferred stock, which entails paying out previous unpaid dividends before any dividends are distributed to common shareholders.
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