The records of Hoffman Company reflected the following balances in the stockhold

Question

The records of Hoffman Company reflected the following balances in the stockholders’ equity accounts at December 31, 2015:

On January 1, 2016, the board of directors was considering the distribution of a $63,500 cash dividend. No dividends were paid during 2014 and 2015.

Determine the total and per-share amounts that would be paid to the common stockholders and to the preferred stockholders under two independent assumptions

Common stock, par $12 per share, 47,500 shares outstanding.   Preferred stock, 8 percent, par $14.5 per share, 7,410 shares outstanding.   Retained earnings, $235,000.

On January 1, 2016, the board of directors was considering the distribution of a $63,500 cash dividend. No dividends were paid during 2014 and 2015.

1.

Determine the total and per-share amounts that would be paid to the common stockholders and to the preferred stockholders under two independent assumptions

b) The preferred stock is cumulative. (Round "Per Share" to 2 decimal places and rest to the nearest dollar amount.) Total Per Share Paid to the Preferred Stockholders Paid to the Common Stockholders a) The preferred stock is noncumulative. (Round "Per Share" to 2 decimal places and rest to the nearest dollar amount.)
Total Per Share Paid to the Preferred Stockholders Paid to the Common Stockholders

Explanation / Answer

Dividend distribution :

A) The preferred stock is non cumulative :

Dividend distribution :

B) The preferred stock is cumulative :

Total Per share Paid to the Preferred Stockholders (7410*14.5*8%) 8596 1.16 Paid to the Common Stockholders (63500-8596) 54904 1.16

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