Stockholders' equity of Ernst Company consists of 88,000 shares of $5 par value, 10% cumulative preferred stock and 320,000 shares of $1 par value common stock. Both classes of stock have been outstanding since the company's inception. Ernst did not declare any dividends in the prior year, but it now declares and pays a $165,000 cash dividend at the current year-end. Determine the amount distributed to each class of stockholders for this two-year-old company. Calculation of preferred dividend: Total cash dividend To preferred shareholders To common shareholders Par Value per Preferred Share $ Dividend Rate Dividend per Preferred Share Number of Preferred Shares Preferred Dividend for two years
Stockholders' equity of Ernst Company consists of 88,000 shares of $5 par value, 10% cumulative preferred stock and 320,000 shares of $1 par value common stock. Both classes of stock have been outstanding since the company's inception. Ernst did not declare any dividends in the prior year, but it now declares and pays a $165,000 cash dividend at the current year-end. Determine the amount distributed to each class of stockholders for this two-year-old company. Calculation of preferred dividend: Total cash dividend To preferred shareholders To common shareholders Par Value per Preferred Share $ Dividend Rate Dividend per Preferred Share Number of Preferred Shares Preferred Dividend for two years
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Stockholders' equity of Ernst Company consists of 88,000 shares of $5 par value, 10% cumulative preferred stock and 320,000 shares
of $1 par value common stock. Both classes of stock have been outstanding since the company's inception. Ernst did not declare any
dividends in the prior year, but it now declares and pays a $165,000 cash dividend at the current year-end.
Determine the amount distributed to each class of stockholders for this two-year-old company.
Calculation of preferred dividend:
Total cash dividend
To preferred shareholders
To common shareholders
Par Value per
Preferred
Share
$
Dividend
Rate
%
Dividend per
Preferred
Share
Number of
Preferred
Shares
Preferred
Dividend for
two years
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