Nortan\'s outstanding stock consists of (a) 15,000 shares of noncumulative 9.00%

Question

Nortan's outstanding stock consists of (a) 15,000 shares of noncumulative 9.00% preferred stock with a $10 par value and (b) 37,500 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends.

2009 $11,000
2010 23,000
2011 120,000
2012 199,000

Requirement 1:

Determine the amount of dividends paid each year to each of the two classes of stockholders. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Preferred Common
2009 $ $
2010 $ $
2011 $ $
2012 $ $

Requirement 2:
Compute the total dividends paid to each class for the four years combined. (Omit the "$" sign in your response.)

Preferred Common
Total dividends for four years $ $

Explanation / Answer

For the preferred stock, 9% of $10 is $0.90 dividend per shares. At 15,000 shares, their dividend would be $13,500 Dividends: 2009: Preferred - 11,000, Common - 0 2010: Preferred - 13,500, common - 9500 2011: Preferred - 13,500, common - 106,500 2012: Preferred - 13,500, Common - 185,500 Totals: preferred - 51500, common - 301,500

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