### Dividends per Share - Example Problem**Context:**Zero Calories Company has issued a total of 15,000 shares of cumulative preferred stock at a 1% dividend rate with a $50 par value. Additionally, the company has 100,000 shares of common stock with a $10 par value. The dividends distributed over the following years are specified below:- **Year 20Y1:** $28,500- **Year 20Y2:** $6,000- **Year 20Y3:** $110,000**Objective:**Determine the dividends per share for both preferred and common stock for each of the specified years:**Preferred Stock Calculation:**1. **Dividend Obligation per Share:** 1% of $50 = $0.50 per share2. **Total Dividend Requirement:** 15,000 shares x $0.50 = $7,500 annually**Assessment for Each Year:**- **20Y1:** - Total Dividends Distributed: $28,500 - Preferred Requirement: $7,500 - Remainder: $28,500 - $7,500 = $21,000 (common stock)- **20Y2:** - Total Dividends Distributed: $6,000 - Preferred Requirement: $7,500 - Shortfall: $7,500 - $6,000 = $1,500 (cumulative into 20Y3)- **20Y3:** - Total Dividends Distributed: $110,000 - Remaining Preferred Requirement from 20Y2: $1,500 - Total Preferred for 20Y3: $7,500 + $1,500 = $9,000 - Remainder for Common Stock: $110,000 - $9,000 = $101,000**Common Stock Calculation:**- Dividends divided by 100,000 shares determine the dividend per share for common stock for each year.---This example problem demonstrates how to calculate and allocate dividends for preferred and common shareholders over various fiscal years, considering cumulative preferred stock.

Dividend per share refers to the amount of dividend that each shareholder is entitled to receive…

Answered: Obj. 2 -BE 12-1 Dividends per share…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Dividend Per Share Windborn Company has 15,000 shares of cumulative preferred 3% stock, $50 par and 50,000 shares of $10 par common stock. The following amounts were distributed as dividends: Year 1 $56,300 Year 2 18,000 Year 3 67,500 Determine the dividend per share for preferred and common stock for each year. Round all answers to two decimal places. If an amount box does not require an entry, leave it blank. Year 1 Year 2 Year 3 Preferred stock (Dividend per share) Common stock (Dividend per share)
Earnings Per Share Financial statement data for the years ended December 31 for Cottontop Corporation follow: 20Y3 20Y2 Net income Preferred dividends Average number of common shares outstanding 95,000 shares a. Determine the earnings per share for 20Y3 and 20Y2. Round your answers to two dectmal places. per share 20Y2 per share b. Does the change in the earnings per share from 20Y2 to 20Y3 indicate a favorable or unfavorable trend?
Dividends Per Share Seacrest Company has 25,000 shares of cumulative preferred 1% stock, $100 par and 50,000 shares of $30 par common stock. The following amounts were distributed as dividends: Year 1 $50,000 Year 2 20,000 Year 3 75,000 Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'. Year 1 Year 2 Year 3 Preferred stock (Dividends per share) $ $ $ Common stock (Dividends per share) $ $ $
MC Qu. 11-153 A company has outstanding... A company has outstanding 13.50 million shares of $5.50 par common stock and 1.7 million shares of $4.70 par preferred stock. The preferred stock has an 9% dividend rate. The company declares $370,000 in total dividends for the year. Which of the following is correct if the preferred stockholders only have a current dividend preference? Multiple Choice O Preferred stockholders will receive the entire $370,000, and they must also be paid $53,000 before the end of the current accounting period. Common stockholders will receive nothing. Preferred stockholders will receive $33,300 or 9% of the total dividends. Common stockholders will receive the remaining $336,700. Preferred stockholders will receive the entire $370,000, and they must also be paid $53,000 sometime in the future before common stockholders will receive anything. Preferred stockholders will receive the entire $370,000, but will receive nothing more relating to this dividend…
A-7
Earnings per share Financial statement data for the years 20Y5 and 20Y6 for Black Bull Inc. follow: 20Y5 20Y6 Net income $1,761,000 $2,532,500 Preferred dividends $60,000 $60,000 Average number of common shares outstanding 90,000 shares 115,000 shares a. Determine the earnings per share for 20Y5 and 20Y6. Round to two decimal places. 20Y5 20Y6 Earnings per Share $fill in the blank 1 $fill in the blank 2 b. Is the change in the earnings per share from 20Y5 to 20Y6 favorable or unfavorable? fill in the blank
Financial statement data for the years ended December 31 for Cottontop Corporation follow: 20Y3 20Y2 Net income $957,250 $832,250 Preferred dividends $146,000 $146,000 Average number of common shares outstanding 55,000 shares 45,000 shares a. Determine the earnings per share for 20Y3 and 20Y2. Round your answers to two decimal places. 20Y3 $fill in the blank 1 per share 20Y2 $fill in the blank 2 per share b. Does the change in the earnings per share from 20Y2 to 20Y3 indicate a favorable or unfavorable trend?Unfavorable
Earnings Per Share Calculati ons Informatlon Provlded: Common Shares Balance at the beginning of the ye ar On July 1, the company sold an additional 5,000,000 shares 8,000,000 shares Each share sold for $3.00 and had a par value of $ 0.10 Preferrred Shares Beginning of the Year End of the Year 50,000 150,000 Dividends pald to Preferred Shareholders Dividends pald to Common Sharehol ders 650, 000 1,000, 000 Ex ce pt from Income Statement Income from Continuing Operations 22,000, 000 Income from Discontinued Ope rations (aftertaxImpact) 2,100, 000 Net Income 24,100, 000 Requlred: Based on the Information provided above: 1 Prepare the Joumal entry to record the July 1 sale of shares 2 Calculate the welghted average common shares outstandi ng 3 Calculate e arnings pershare (as required). Note: Show your detal led calaulatlons.
A company declared and distributed an 8% dividend on 800,000 shares of $5 par value common stock outstanding. Market price per common share on this date was $25. What is the debit to Retained Earnings for the value of the stock dividend? O $64,000 O $320,000 O $1,600,000 O $40,000,000 79°F Rair
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Dividends per share Windborn Company has 10,000 shares of cumulative preferred 1% stock, $50 par and 50,000 shares of $20 par common stock. The following amounts were distributed as dividends: 20Y1 20Y2 20Y3 Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'. Preferred Stock Common Stock (dividends per share) (dividends per share) 0. X 20Y1 20Y2 20Y3 Feedback $7,500 4,000 15,000 Check My Work 0.50 0.40 0.60 0.00 0.18 m

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