Required information Use the following information for the Exercises below. The

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Required information Use the following information for the Exercises below. The following information applies to the questions displayed below.] York's outstanding stock consists of 70,000 shares of noncumulative 60% preferred stock with a $5 par value and also 180,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation de paid the following total cash dividends: clared and 2015 total cash dividends 2816 total cash dividends 2017 total cash dividends 2018 total cash dividends S 9,100 19,000 295,000 445,000 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 total dividends paid to each class for the four years combined. (Round your "Dividend per Preferred Share" answers to 3 decimal places.) Par Value per Dividend per Number of Preferred Preferred Dividend Preferred Dividend Rate PreferredP Share Share Shares 5.00 60% 70 Annual Preferred Dividend: Dividends in Arrears at Paid to Paid to Total Cash Dividend Paid Preferred Common year-end

Explanation / Answer

Solution: Par value per Preferred Share Dividend Rate Dividend per Preferred Share Number of Preferred Shares Preferred Dividend Annual Preferred Dividend $5 6% 0.3 70,000               21,000 Total Cash Dividend Paid Paid to Preferred Paid to Common Dividends in Arrears at year end 2015 9,100 9,100 2016 19,000 19,000 2017 295,000 21,000 274,000 2018 445,000 21,000 424,000 Total 768,100 21,000 747,100 Working Notes: Since the preferred stock is noncumulative if Preferred dividend is not paid in particular year it cannot be carried forward as arrears. So, first preference is given to preferred stockholders then Common stockholders in any year of payment of Dividends to stockholders. a b c=a x b d e=c x d Par value per Preferred Share Dividend Rate Dividend per Preferred Share Number of Preferred Shares Preferred Dividend Annual Preferred Dividend $5 6% 0.3 70,000               21,000 a b c= a-b Total Cash Dividend Paid Paid to Preferred Paid to Common Dividends in Arrears at year end 2015 9,100 9,100 2016 19,000 19,000 2017 295,000 21,000 274,000 2018 445,000 21,000 424,000 Total 768,100 21,000 747,100 Please feel free to ask if anything about above solution in comment section of the question.

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