Marin Corp. had $100,000 of 7%, $20 par value preferred stock and 12,000 shares

Question

Marin Corp. had $100,000 of 7%, $20 par value preferred stock and 12,000 shares of $25 par value common stock outstanding throughout 2017.

Assuming that total dividends declared in 2017 were $64,000, and that the preferred stock is not cumulative but is fully participating, common stockholders should receive 2017 dividends of what amount?

Common stockholders should receive $________________

Assuming that total dividends declared in 2017 were $64,000, and that the preferred stock is fully participating and cumulative with preferred dividends in arrears for 2016, preferred stockholders should receive 2017 dividends totaling what amount?

Preferred stockholders should receive. $___________________

Assuming that total dividends declared in 2017 were $30,000, that the preferred stock is cumulative, nonparticipating, and was issued on January 1, 2016, and that $5000 of preferred dividends were declared and paid in 2016, the common stockholders should receive 2017 dividends totaling what amount?

Common stockholders should receive $______________________

I have looked at some other examples but I don't understand which number is the answer since there is only 1 answer.

Explanation / Answer

Number of shares Par Value Total Value Interest @ 7% Per year on preferred shares Peferred Capital = 5000 $                         20 $                  1,00,000 $                                                            7,000 Common Share Capital = 12000 $                         25 $                  3,00,000 Cumulative means the if the preference dividend is not paid in the last year then that shoul be accumulate in next years payment ot it will carry forward as unpaid dividend IF THE PREFERENCE SHARES ARE NON CUMULATIVE Year total Cash Dividend Paid (A) Paid to Preferred Stock (B) Paid to Common Shares (A -B) Dividend in the arreas Remarks Option 1 $               64,000.00 $                                       7,000.00 $           57,000.00 $                               -   Answer= Common Shareholder will receive the $ 57,000 IF THE PREFERENCE SHARES ARE CUMULATIVE Year total Cash Dividend Paid (A) Paid to Preferred Stock (B) Paid to Common Shares (A -B) Dividend in the arreas Remarks Option 2 $               64,000.00 $                                     14,000.00 $           50,000.00 $                               -   Answer = Preferred shareholders will received the $ 7,000 for the last year and $ 7,000 in current year also. So total is in the year = $14,000 IF THE PREFERENCE SHARES ARE CUMULATIVE Year total Cash Dividend Paid (A) Paid to Preferred Stock (B) Paid to Common Shares (A -B) Dividend in the arreas Remarks Option 3 $               30,000.00 $                                       9,000.00 $           21,000.00 $                               -   Amount paid to Preference Share holders is $ 7,000 for the current year + $ 2000 ($ 7,000 - $ 5,000) for the last year Common share holders will receive the Balance $ 21,000

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.