Preference over dividends4. Rainbow Co. has 100,000 (P50 par) 6% preference shares and250.000 (P40 par) ordinary shares outstanding since it startedoperations three years ago. Rainbow Co. has never declareddividends. In Year 3, Rainbow Co. plans to declare P2,000,000dividends. What amounts of dividends would the preferenceand ordinary shareholders receive, respectively, if thepreference shares are:al Noncumulative and non-participating?b) Cumulative and non-participating?Noncumulative and participating?d) Cumulative and participating?e) Cumulative and participating up to 16%?Cumulative and non-participating and Rainbow Co. declaredtotal cash dividends of P100,000 in Year 1 and P80,000 in Year 2?

Note: As per our guidelines, we will solve the first three subparts for you. a)

Answered: Preference over dividends 4. Rainbow…

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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