### Dividends on Preferred and Common Stock**Pecan Theater Inc.** owns and operates movie theaters throughout Florida and Georgia. The following is an analysis of their annual dividends over a six-year period.#### Outstanding Stock Information- **Preferred Stock**: 40,000 shares of cumulative 4% stock, $100 par value.- **Common Stock**: 100,000 shares, $25 par value.#### Dividend Data (201Y1 to 201Y6)- **201Y1**: $64,000- **201Y2**: $128,000- **201Y3**: $280,000- **201Y4**: $352,000- **201Y5**: $448,000- **201Y6**: $576,000#### Requirements1. **Determine Total and Per Share Dividends for Each Class of Stock for Six Years** - Calculate the dividends declared for preferred and common stock each year. - Summarize the dividends in a table format.2. **Average Annual Dividend per Share for Each Class** - Compute the average dividend per share over the six-year period for both preferred and common stock.3. **Average Annual Percentage Return on Initial Investment** - Use a market price per share of $123 for preferred stock and $30 for common stock. - Calculate the average annual percentage return based on the dividend per share.#### Table DescriptionThere is a table with columns for each year (201Y1 to 201Y6) and rows to input data for:- Total Dividends- Preferred Dividends (Total and Per Share)- Common Dividends (Total and Per Share)The table helps provide clarity on dividend distribution and assists with calculating averages and returns on investment.

Solution: Annual preferred dividend = 40000*100*4% = 160,000 Preferred Dividends Common Dividends Year Total Dividends Total Per Share Total Arrears at year end Total Per Share Year 1 $64,000 $64,000 $1.60 $96,000 $0 $0.00 Year 2 $1,28,000 $1,28,000 $3.20 $1,28,000 $0 $0.00 Year 3 $2,88,000 $2,88,000 $7.20 $0 $0 $0.00 Year 4 $3,52,000 $1,60,000 $4.00 $0 $1,92,000 $1.92 Year 5 $4,48,000 $1,60,000 $4.00 $0 $2,88,000 $2.88 Year 6 $5,76,000 $1,60,000 $4.00 $0 $4,16,000 $4.16 Total $9,60,000 $8,96,000 Solution 2: Preferred Common Total dividend for 6 years $9,60,000 $8,96,000 / Number of years 6 6 Total Annual Dividend 160000 149333 / Number of shares 40000 100000 Average annual dividend per share $4.00 $1.49 Solution 3: Average annual dividend per share $4.00 $1.49 /Market Price $235.00 $30.00 Average annual percentage return 1.70% 4.97%

Business

Accounting

%24 Pecan The re IHe, 8WHS and 8perates movle theatėrs throughõut 20Y6, $576,000. During the entire period ended December 31 of Required: 1. Determine the total dividends and the per-share dividends dec to two decimal places. If the amount is zero, please enter "0". Preferred Dividends Total Year Dividends Total Per S 20Υ1 $ 64,000 20Υ2 128,000 20Υ3 288,000 20Y4 352,000 20Υ5 448,000 20Υ6 576,000

%24 Pecan The re IHe, 8WHS and 8perates movle theatėrs throughõut 20Y6, $576,000. During the entire period ended December 31 of Required: 1. Determine the total dividends and the per-share dividends dec to two decimal places. If the amount is zero, please enter "0". Preferred Dividends Total Year Dividends Total Per S 20Υ1 $ 64,000 20Υ2 128,000 20Υ3 288,000 20Y4 352,000 20Υ5 448,000 20Υ6 576,000

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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