Exercise 15-21 The outstanding capital stock of Metlock Corporation consists of

Question

Exercise 15-21 The outstanding capital stock of Metlock Corporation consists of 1,800 shares of $100 par value, 7% preferred, and 4,500 shares of $50 par value common. Assuming that the company has retained earnings of $86,500, all of which is to be paid out in dividends, and that preferred dividends were not paid during the 2 years preceding the current year, state how much each class of stock should receive under each of the following conditions. (a) The preferred stock is noncumulative and nonparticipating. (Round answers to O decimal places, e.g. $38,487.) Preferred Common (b) The preferred stock is cumulative and nonparticipating. (Round answers to O decimal places, e.g. $38,487.) Preferred Common (c) The preferred stock is cumulative and participating. (Round the rate of participation to 4 decimal places, e.g. 1.4278%. Round answers to 0 decimal places, e.g. $38,487.) Preferred Commorn Click if you would like to Show Work for this question: Qpen Show Work

Explanation / Answer

Workings:

Preferred Common (a) Noncumulative and nonparticipating 12600 73900 (b) Cumulative and nonparticipating 37800 48700 (c) Cumulative and participating 52444 34056

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