Jamail Company has outstanding 2,500 shares of $100 par, 6% preferred stock and
ID: 2451667 • Letter: J
Question
Jamail Company has outstanding 2,500 shares of $100 par, 6% preferred stock and 15,000 shares of $10 par value common. The schedule below shows the amount of dividends paid out over the last 4 years.
Required:
Allocate the dividends to each type of stock under assumptions (a) and (b). Express your answers using the format shown below:
Assumptions
Year
Paid-out
(a)
Preferred, noncumulative, and nonparticipating
Preferred Common
(b)
Preferred, cumulative, and fully participating
Preferred Common
20X1
$12,000
20X2
$26,000
20X3
$52,000
20X4
$76,000
Assumptions
Year
Paid-out
(a)
Preferred, noncumulative, and nonparticipating
Preferred Common
(b)
Preferred, cumulative, and fully participating
Preferred Common
20X1
$12,000
20X2
$26,000
20X3
$52,000
20X4
$76,000
Explanation / Answer
Assumptions
Year
Paid-out
(a)
Preferred, noncumulative, and nonparticipating
Preferred Common
(b)
Preferred, cumulative, and fully participating
Preferred Common
20X1
$12,000
Dividend for Equity/Common shares= $ 7500; DPS= $ 3
Dividend for Preferred shares= $ 4500; DPS= $ 0.3
Dividend for Equity/Common shares= $ 3000; DPS= $ 1.2
Dividend for Preferred shares= $ 9000; DPS= $ 0.6
20X2
$26,000
Dividend for Equity/Common shares= $ 16250; DPS= $ 6.5
Dividend for Preferred shares= $ 9750; DPS= $ 0.65
Dividend for Equity/Common shares= $ 17000; DPS= $ 6.8
Dividend for Preferred shares= $ 9000; DPS= $ 0.6
20X3
$52,000
Dividend for Equity/Common shares= $ 32500; DPS= $ 13
Dividend for Preferred shares= $ 19500; DPS= $ 1.3
Dividend for Equity/Common shares= $ 43000; DPS= $ 17.2
Dividend for Preferred shares= $ 9000; DPS= $ 0.6
20X4
$76,000
Dividend for Equity/Common shares= $ 47500; DPS= $ 19
Dividend for Preferred shares= $ 28500; DPS= $ 1.9
Dividend for Equity/Common shares= $ 67000; DPS= $ 26.8
Dividend for Preferred shares= $ 9000; DPS= $ 0.6
Assumptions
Year
Paid-out
(a)
Preferred, noncumulative, and nonparticipating
Preferred Common
(b)
Preferred, cumulative, and fully participating
Preferred Common
20X1
$12,000
Dividend for Equity/Common shares= $ 7500; DPS= $ 3
Dividend for Preferred shares= $ 4500; DPS= $ 0.3
Dividend for Equity/Common shares= $ 3000; DPS= $ 1.2
Dividend for Preferred shares= $ 9000; DPS= $ 0.6
20X2
$26,000
Dividend for Equity/Common shares= $ 16250; DPS= $ 6.5
Dividend for Preferred shares= $ 9750; DPS= $ 0.65
Dividend for Equity/Common shares= $ 17000; DPS= $ 6.8
Dividend for Preferred shares= $ 9000; DPS= $ 0.6
20X3
$52,000
Dividend for Equity/Common shares= $ 32500; DPS= $ 13
Dividend for Preferred shares= $ 19500; DPS= $ 1.3
Dividend for Equity/Common shares= $ 43000; DPS= $ 17.2
Dividend for Preferred shares= $ 9000; DPS= $ 0.6
20X4
$76,000
Dividend for Equity/Common shares= $ 47500; DPS= $ 19
Dividend for Preferred shares= $ 28500; DPS= $ 1.9
Dividend for Equity/Common shares= $ 67000; DPS= $ 26.8
Dividend for Preferred shares= $ 9000; DPS= $ 0.6
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