
Reporting
• LO18–4, LO18–7
Ozark Distributing Company is primarily engaged in the wholesale distribution of consumer products in the Ozark Mountain regions. The following disclosure note appeared in the company’s 2018 annual report:
Note 5. Convertible Preferred Stock (in part):
The Company has the following Convertible Preferred Stock outstanding as of September 2018:
Date of issuance: | June 17, 2015 |
Optionally redeemable beginning: | June 18, 2017 |
Par value (gross proceeds): | $2,500,000 |
Number of shares: | 100,000 |
Liquidation preference per share: | $25.00 |
Conversion price per share: | $30.31 |
Number of common shares in which to be converted: | 82,481 |
6.785% |
The Preferred Stock is convertible at any time by the holders into a number of shares of Ozark’s common stock equal to the number of preferred shares being converted times a fraction equal to $25.00 divided by the conversion price. The conversion prices for the Preferred Stock are subject to customary adjustments in the event of stock splits, stock dividends and certain other distributions on the Common Stock. Cumulative dividends for the Preferred Stock are payable in arrears, when, as, and if declared by the Board of Directors, on March 31, June 30, September 30, and December 31 of each year.
The Preferred Stock is optionally redeemable by the Company beginning on various dates, as listed above, at redemption prices equal to 112% of the liquidation preference. The redemption prices decrease 1% annually thereafter until the redemption price equals the liquidation preference, after which date it remains the liquidation preference.
Required:
1. What amount of dividends is paid annually to a preferred shareholder owning 100 shares of the Series A preferred stock?
2. If dividends are not paid in 2019 and 2020, but are paid in 2021, what amount of dividends will the shareholder receive?
3. If the investor chooses to convert the shares in 2019, how many shares of common stock will the investor receive for his/her 100 shares?
4. If Ozark chooses to redeem the shares on June 18, 2019, what amount will the investor be paid for his/her 100 shares?

Trending nowThis is a popular solution!

Chapter 18 Solutions
Intermediate Accounting
- Mit Distributors provided the following inventory-related data for the fiscal year: Purchases: $385,000 Purchase Returns and Allowances: $10,200 Purchase Discounts: $4,300 Freight In: $55,000 Beginning Inventory: $72,000 Ending Inventory: $95,500 What is the Cost of Goods Sold (COGS)?arrow_forwardanswer ? general accountingarrow_forwardBrightTech Corp. reported the following cost of goods sold (COGS) figures over three years: • 2023: $3,800,000 • 2022: $3,500,000 • 2021: $3,000,000 If 2021 is the base year, what is the percentage increase in COGS from 2021 to 2023?arrow_forward
- Sun Electronics operates a periodic inventory system. At the beginning of 2022, its inventory was $95,750. During the year, inventory purchases totaled $375,000, and its ending inventory was $110,500. What was the cost of goods sold (COGS) for Sun Electronics in 2022?arrow_forwardi want to this question answer of this general accountingarrow_forwardA clothing retailer provides the following financial data for the year. Determine the cost of goods sold (COGS): ⚫Total Sales: $800,000 • Purchases: $500,000 • Sales Returns: $30,000 • Purchases Returns: $40,000 • Opening Stock Value: $60,000 • Closing Stock Value: $70,000 Administrative Expenses: $250,000arrow_forward
- subject : general accounting questionarrow_forwardBrightTech Inc. had stockholders' equity of $1,200,000 at the beginning of June 2023. During the month, the company reported a net income of $300,000 and declared dividends of $175,000. What was BrightTech Inc.. s stockholders' equity at the end of June 2023?arrow_forwardQuestion 3Footfall Manufacturing Ltd. reports the following financialinformation at the end of the current year: Net Sales $100,000 Debtor's turnover ratio (based on net sales) 2 Inventory turnover ratio 1.25 fixed assets turnover ratio 0.8 Debt to assets ratio 0.6 Net profit margin 5% gross profit margin 25% return on investments 2% Use the given information to fill out the templates for incomestatement and balance sheet given below: Income Statement of Footfall Manufacturing Ltd. for the year endingDecember 31, 20XX(in $) Sales 100,000 Cost of goods sold gross profit other expenses earnings before tax tax @ 50% Earnings after tax Balance Sheet of Footfall Manufacturing Ltd. as at December 31, 20XX(in $) Liabilities Amount Assets Amount Equity Net fixed assets long term debt 50,000 Inventory short term debt debtors cash Total Totalarrow_forward
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
