Concept introduction:
Cash dividend:
The Cash dividend is the amount of dividend paid to shareholders in cash. The Cash dividend is declared first and paid later. There are two
Requirement 1:
To calculate:
The amount of preferred dividend for each issue and total amount of dividend.
Concept introduction:
Cash dividend:
The Cash dividend is the amount of dividend paid to shareholders in cash. The Cash dividend is declared first and paid later. There are two journal entries made, one at the time of declaration of dividend and another at the time of payment.
Requirement 2:
To calculate:
The amount of preferred dividend in arrear.
Want to see the full answer?
Check out a sample textbook solutionChapter 10 Solutions
Cornerstones of Financial Accounting
- Cumulative Preferred Dividends Capital stock of Barr Company includes: As of December 31, 2018, 2 years dividends are in arrears on the preferred stock. During 2019, Barr plans to pay dividends that total S360.000. Required: Determine the amount of dividends that will be paid to Barrs common and preferred stockholders in 2019. If Barr paid $280,000 of dividends, determine how much each group of stockholders would receive.arrow_forwardDividends on Preferred and Common Stock Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: Year 1, $24,000; Year 2, $48,000; Year 3, $108,000; Year 4, $138,000; Year 5, $174,000; and Year 6, $210,000. During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 30,000 shares of cumulative preferred 2% stock, $100 par, and 100,000 shares of common stock, $5 par. Required: 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of Year 1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0". Preferred Dividends Common Dividends Total Year Dividends Total Per Share Total Per Share $ 24,000 1.60 x Year 1 %2$ 24,000 Year 2 48,000 48,000…arrow_forwardDividend Yield At the market close of a recent year, McDonald’s Corporation had a closing stock price of $198.01. In addition, McDonald’s Corporation had a dividend per share of $4.19 during the previous year. Determine McDonald’s Corporation’s dividend yield. Round to one decimal place.arrow_forward
- Black Bear Bike Corp. manufactures mountain bikes and distributes them through retail outlets in California, Oregon, and Washington. Black Bear Bike Corp. has declared the following annual dividends over a six-year period ended December 31 of each year: Year 1, $42,500; Year 2, $18,000; Year 3, $223,500; Year 4, $178,000; Year 5, $222,000; and Year 6, $222,000. During the entire period, the outstanding stock of the company was composed of 50,000 shares of cumulative preferred 2% stock, $80 par, and 100,000 shares of common stock, $4 par. Required: 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears on January 1, Year 1. Summarize the data in tabular form. If required, round your per share answers to two decimal places. If the amount is zero, please enter "0". Preferred Dividends Common Dividends Total Year Dividends Total Per Share Total Per Share Year 1 $42,500 $ Year 2 18,000 Year 3…arrow_forwardCalculate the cash dividends required to be paid for each of the following preferred stock issues: Required: a. The semiannual dividend on 7% cumulative preferred, $53 par value, 5,200 shares authorized, issued, and outstanding. b. The annual dividend on $1.75 cumulative preferred, 60,000 shares authorized, 36,000 shares issued, 31,800 shares outstanding. Last year's dividend has not been paid. c. The quarterly dividend on 11.0% cumulative preferred, $90 stated value, $107 liquidating value, 36,000 shares authorized, 31,200 shares issued and outstanding. No dividends are in arrears a. Semi-annual dividend b. Cumulative dividend e Quarterly dividendarrow_forwardAt the market close of a recent year, McDonald’s Corporation had a closing stock price of $198.01. In addition, McDonald’s Corporation had a dividend per share of $4.19 during the previous year. Determine McDonald’s Corporation’s dividend yield. Round to one decimal place.fill in the blank 1%arrow_forward
- Dividends Andrews Company has $95,000 available to pay dividends. It has 2,000 shares of 10%, $100 par, preferred stock and 30,000 shares of $10 par common stock outstanding. The preferred stock is selling for $100 per share, and the common stock is selling for $25 per share. Required 1. Determine the amount of dividends to be paid to each class of shareholder for each of the following independent assumptions. If an amount box required no entry, leave it blank. a. Preferred stock is nonparticipating and noncumulative. Andrews Company Schedule of dividends to be paid Preferred dividend Remainder to common Total Preferred Commonarrow_forward↑ Dewyco has preferred stock trading at $53 per share. The next preferred dividend of $3 is due in one year. What is Dewyco's cost of capital for preferred stock? The cost of capital for preferred stock is (Round to one decimal place)arrow_forwardеВook Farley Inc. has perpetual preferred stock outstanding that sells for $44 a share and pays a dividend of $2.00 at the end of each year. What is the required rate of return? Round your answer to two decimal places. %arrow_forward
- Preferred stock valuation Fee Founders has perpetual preferred stock outstanding that sells for $40.00 a share and pays a dividend of $4.00 at the end of each year. What is the required rate of return? Round your answer to two decimal places. %arrow_forwardQuestion: An oil company has issued preferred stock with $10 annual dividend that will be paid in perpetuity. If the discount rate is 14%. What price must the stock sale?arrow_forwardXYZ Co. will pay a $4.20 per share dividend on common stock at the end of the year. The Ke = 11.8%. The g = 6.8%. Compute the current price of the stock.arrow_forward
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningEBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENTFinancial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning