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Do Homework- Steven Kos - Google Chrome a Secure I https://www.mathxl.com/Student/PlayerHomework.aspx?homeworkid-4684125088qu Acct2301.S04-Spring, 2018 Save Homework: Homework - Chapter 10 Score: 0 of 1 pt 3 of 8 (3 complete) HW Score: 25%, 2 of 8 pts E10-30A (similar to) EQuestion Help Great Lakes Manufacturing, Inc., reported the following at December 31, 2016, and December 31, 2017 (Click the icon to view the data.) Great Lakes Manufacturing has paid all preferred dividends only through 2013 Requirement 1. Compute the total amounts of dividends to both preferred and common for 2016 and 2017 if total dividends are $100,000 in 2016 and $300,000 in 2017 Begin with 2016. Compute the total amounts of dividends to both preferred and common for 2016 if total dividends are $100,000 Class of Stock 2016 Dividends Preferred Common Total Enter any number in the edit fields and then click Check Answer. part remaining Clear All Check Answer O Type here to search

Explanation / Answer

For the “Preferred Stocks”, the dividend would be equal to 6% of its par value each year.

So, the preferred dividend per stock = $6 x 6% = $0.36

2016:

Dividends on Preferred Stock = $0.36 x 60,000 = $21,600

Dividends on Common Stock = Total Dividends - Dividends paid on Preferred stock in the year
=> $100,000 - $21,600 = $78,400

2017:

Dividends on Preferred Stock = $0.36 x 60,000 = $21,600

Dividends on Common Stock = Total Dividends - Dividends paid on Preferred stock in the year
=> $300,000 - $21,600 = $278,400

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