Do It! Review 11-3a Bramble Corp. has 2,200 shares of 9%, $102 par value preferr

Question

Do It! Review 11-3a

Bramble Corp. has 2,200 shares of 9%, $102 par value preferred stock outstanding at December 31, 2017. At December 31, 2017, the company declared a $118,000 cash dividend.

Determine the dividend paid to preferred stockholders and common stockholders under each of the following scenarios.

1. The preferred stock is noncumulative, and the company has not missed any dividends in previous years.

2. The preferred stock is noncumulative, and the company did not pay a dividend in each of the two previous years.

3. The preferred stock is cumulative, and the company did not pay a dividend in each of the two previous years.

Explanation / Answer

Annual preferred dividends = 2200*102*9%= $20196 1 The dividend paid to preferred stockholders 20196 The dividend paid to common stockholders 97804 =118000-20196 2 The dividend paid to preferred stockholders 20196 The dividend paid to common stockholders 97804 3 The dividend paid to preferred stockholders 60588 =20196*3 The dividend paid to common stockholders 57412 =118000-60588

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