Exercise 12-5 e Cash Dividends on Preferred and Common Stock Ex-Act Corporation

Question

Exercise 12-5 e Cash Dividends on Preferred and Common Stock Ex-Act Corporation pays dividends at the end of each year. The dividends that it paid for 2012, 2013, and 2014 were $160,000, $120,000, and $360,000, respectively i. Caloulete the total amount of dividends Ex Act paid in each of these years to iles common and preferred stockholders under the following capital structure: 40,000 shares of $100 par, 6 percent poeumulative preferred stock and 120,00 shares of $10 par common seck. Ex-Act had no dividends in arrears at the beginning of 2012. Df an amout is zero, enter Common Stock Dividends 2012 reterred 2. Calculate th, total ont ofdividends tx?Act paid in each ofthese years to its common and preferred toah les-der-he follo-ng $10 par common stock. Ex-Act had no dividends in arrears amount is zaro, enter capital structune: 20,000 shares of $300 par, 7 pencent swwletes.ersferret stesk and 120,000 shares of : at the beginning of 2012 ira comnion Stock DividendTot 2012 014 Exercise 12-0 Cenpage LearsingCn bo 80

Explanation / Answer

1. Calculation of the amount of dividend to common and preferred shareholders 40000 shares of $100 par, 6% noncumulative preferred stock 120000 shares of $10 par common stock Dividend on preferred stock = $4,000,000 x 6% = $240000 Preferred stock Dividends Common Stock Dividends Total 2012 $160,000 $160,000 2013 $120,000 $120,000 2014 $240,000 $120,000 $360,000 2. Calculation of the amount of dividend to common and preferred shareholders 20000 shares of $100 par, 7% cumulative preferred stock 120000 shares of $10 par common stock Dividend on preferred stock = $2,000,000 x 7% = $140000 Preferred stock Dividends Common Stock Dividends Total 2012 $140,000 $20,000 $160,000 2013 $120,000 $120,000 2014 $160,000 $200,000 $360,000 In year 2013, Ex-Act corporation pays only $120000 as dividend to preferred stock thus $20000 is in arrears which is paid in 2014.

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

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