The records of Hollywood Company reflected the following balances in the stockho

Question

The records of Hollywood Company reflected the following balances in the stockholders' equity accounts at the end of the current year:

Common stock, $11 par value, 39,000 shares outstanding

Preferred stock, 9 percent, $9 par value, 6,000 shares outstanding

Retained earnings, $221,000

On September 1 of the current year, the board of directors was considering the distribution of an $77,000 cash dividend. No dividends were paid during the previous two years. You have been asked to determine dividend amounts under two independent assumptions (show computations):

a. The preferred stock is noncumulative.

b. The preferred stock is cumulative.

Required:

1. Determine the total and per share amounts that would be paid to the common stockholders and the preferred stockholders under the two independent assumptions. (Round "per share" to 2 decimal places.)

Preferred Common Noncumulative Total Per Share Cumulative Total Per Share

Explanation / Answer

Preferred Common Noncumulative Total 4860 72140 Per Share 0.81 1.85 Cumulative Total 14580 62420 Per Share 2.43 1.60

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