Sweet Company’s outstanding stock consists of 1,800 shares of cumulative 5% preferred stock with a $100 par value and 11,800 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividends Declared & PaidYear 1$ 3,800Year 2$ 7,800Year 3$ 41,000The total amount of dividends paid to preferred and common shareholders over the three-year period is: Multiple Choice $27,000 preferred; $25,600 common. $16,800 preferred; $35,800 common. $9,000 preferred; $43,600 common. $21,800 preferred; $30,800 common. $18,000 preferred; $34,600 common.

Dividend per share: Dividend per share is calculated for Preferred stock as well as Common Stock. The dividend per share is shown and the Statement of Profit & Loss. The dividend per share denotes the earnings distributed per share.Annual Dividend to Preferred shareholders = No. of preferred share outstanding x Par value per share x rate of dividend = 1,800 shares x $100 x 5% = $9,000Year Total cash dividend paid Paid to preferred paid to common Dividend in arrears at year-end 1 $3,800 $3,800 0 $5,200 2 $7,800 $7,800 0 $6,400 3 $41,000 $15,400 $25,600 0 Total $27,000 $25,600 Option #1. $27,000 preferred; $25,600 common is the correct answer.

Answered: Sweet Company’s outstanding stock…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Sweet Company’s outstanding stock consists of 1,800 shares of cumulative 5% preferred stock with a $100 par value and 11,800 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.