Plained Earnings at December 31, 2021: Common Stock (par $8; issued and outstanding, 22,000 shares) Preferred Stock, 8% (par $10; issued and outstanding, 5,200 1 shares) Retained Earnings $ 176,000 52,000 272,000 On December 31, 2021, the board of directors is considering the distribution of a cash dividend to the common and preferred stockholders. No dividends were declared during 2019 or 2020, and none have been declared yet in 2021. Three independent cases are assumed: Case A: The preferred stock is non cumulative; the total amount of 2021 dividends would be $11,800. Case B: The preferred stock is cumulative; the total amount of 2021 dividends would be $12,480. Dividends were not in arrears prior to 2019. Case C: Same as Case 8, except the total dividends are $58,000. Required: 1-a. Compute the amount of 2021 dividends, in total that would be payable to each class of stockholders if dividends were declared as described in each case. TIP: Preferred stockholders with cumulative dividends are to be paid dividends for any prior years (in arrears) and for the current year before common stockholders are paid. 1-b. Compute per case, the 2021 dividends per share publ
Plained Earnings at December 31, 2021: Common Stock (par $8; issued and outstanding, 22,000 shares) Preferred Stock, 8% (par $10; issued and outstanding, 5,200 1 shares) Retained Earnings $ 176,000 52,000 272,000 On December 31, 2021, the board of directors is considering the distribution of a cash dividend to the common and preferred stockholders. No dividends were declared during 2019 or 2020, and none have been declared yet in 2021. Three independent cases are assumed: Case A: The preferred stock is non cumulative; the total amount of 2021 dividends would be $11,800. Case B: The preferred stock is cumulative; the total amount of 2021 dividends would be $12,480. Dividends were not in arrears prior to 2019. Case C: Same as Case 8, except the total dividends are $58,000. Required: 1-a. Compute the amount of 2021 dividends, in total that would be payable to each class of stockholders if dividends were declared as described in each case. TIP: Preferred stockholders with cumulative dividends are to be paid dividends for any prior years (in arrears) and for the current year before common stockholders are paid. 1-b. Compute per case, the 2021 dividends per share publ
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Stock outstanding and Retained Earnings at December 31, 2021:
$ 176,000
52,000
272,000
Common Stock (par $8; issued and outstanding, 22,000 shares)
Preferred Stock, 8% (par $10; issued and outstanding, 5,200
shares)
Retained Earnings
On December 31, 2021, the board of directors is considering the distribution of a cash dividend to the common and preferred
stockholders. No dividends were declared during 2019 or 2020, and none have been declared yet in 2021. Three independent cases
are assumed:
Case A: The preferred stock is non cumulative; the total amount of 2021 dividends would be $11,800.
Case B: The preferred stock is cumulative; the total amount of 2021 dividends would be $12,480. Dividends were not in
arrears prior to 2019.
Case C: Same as Case B, except the total dividends are $58,000.
Required:
1-a. Compute the amount of 2021 dividends, in total that would be payable to each class of stockholders if dividends were declared as
described in each case. TIP: Preferred stockholders with cumulative dividends are to be paid dividends for any prior years (in
arrears) and for the current year before common stockholders are paid.
1-b. Compute per case, the 2021 dividends per share, payable to each class of stockholders.
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