The stockholders’ equity section of Joshua Company shows the following on December 31, 2022: Preferred stock, 4%, $50 par value, 5,000 shares outstanding $250,000 Common stock, $5 par value, 80,000 shares outstanding 400,000 Paid-in capital in excess of par, common stock 200,000 Retained earnings 210,000 Total stockholders’ equity $1,060,000 Required: Assume that the corporation has determined to pay out $70,000 in dividends at December 31, 2022. The last time that dividends were paid was on December 31, 2020. Calculate the amount of dividends that would be paid to preferred shareholders and the amount that would be paid to common shareholders under the following independent situations: The preferred stock is noncumulative and nonparticipating. 2.The preferred stock is cumulative and nonparticipating. 3. The preferred stock is cumulative and fully participating.
- The
stockholders’ equity section of Joshua Company shows the following on December 31, 2022:
Common stock, $5 par value, 80,000 shares outstanding 400,000
Paid-in capital in excess of par, common stock 200,000
Total stockholders’ equity $1,060,000
Required:
Assume that the corporation has determined to pay out $70,000 in dividends at December 31, 2022. The last time that dividends were paid was on December 31, 2020. Calculate the amount of dividends that would be paid to preferred shareholders and the amount that would be paid to common shareholders under the following independent situations:
- The preferred stock is noncumulative and nonparticipating.
2.The preferred stock is cumulative and nonparticipating.
3. The preferred stock is cumulative and fully participating.
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