Use the following information for the Exercises below. [The following informatio

Question

Use the following information for the Exercises below.

[The following information applies to the questions displayed below.]

York’s outstanding stock consists of 80,000 shares of noncumulative 7.0% preferred stock with a $5 par value and also 140,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends:
  

Exercise 11-9 Dividends on common and cumulative preferred stock LO C2

Determine the amount of dividends paid each year to each of the two classes of stockholders assuming that the preferred stock is cumulative. Also determine the total dividends paid to each class for the four years combined. (Round your "Dividend per Preferred Share" answers to 3 decimal places.)

2015 total cash dividends $ 16,500 2016 total cash dividends 26,000 2017 total cash dividends 275,000 2018 total cash dividends 425,000

Explanation / Answer

Exercise 11-8 Dividends on common and noncumulative preferred stock LO C2

Determine the amount of dividends paid each year to each of the two classes of stockholders: preferred and common. Also compute the total dividends paid to each class for the four years combined.

Annual preferred dividend = 80000*5*7% = 28000

Preferred Common Total 2015 total cash dividends 16500 0 16500 2016 total cash dividends 26000 0 26000 2017 total cash dividends 41500 233500 275000 2018 total cash dividends 28000 397000 425000 Total 112000 630500 742500

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