Question 8 Knudsen Corporation was organized on January 1, 2013. During its firs

Question

Question 8

Knudsen Corporation was organized on January 1, 2013. During its first year, the corporation issued 2,000 shares of $50 par value preferred stock and 105,500 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2013, $6,000; 2014, $14,200; and 2015, $28,000.

2013

2014

2015

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2013

2014

2015

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Question 8

Knudsen Corporation was organized on January 1, 2013. During its first year, the corporation issued 2,000 shares of $50 par value preferred stock and 105,500 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2013, $6,000; 2014, $14,200; and 2015, $28,000.

Explanation / Answer

6% 2013 2014 2015 Allocation to Preferred Stock 2000*50*6% 6000 2000*50*6% 6000 6000 Allocation to common stock 0 8200 22000 (28000-6000) Total 6000 14200 28000 95% 2013 2014 2015 Allocation to Preferred Stock 2000*50*9% Max to 6000 6000 2000*50*9% 9000 9000 Allocation to common stock 0 5200 19000 (28000-6000) Total 6000 14200 28000

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