Accounting Question RE Stocks help*?
A company have stock outstanding as follows during respectively of its first three years of operation: 2,000 shares of $10, $100 par, cumulative, nonparticipating preferred stock and 50,000 shares of $10 par adjectives stock. The amounts distributed as dividends are presented below. Determine the total and per share dividends for respectively class of stock for respectively year by completing the diary.
preferred common
year dividends Total Per Share Total Per Share
1 $10,000 _______ ______ _______ ________
2 25000 _______ ______ ______ _______
3 60,000 _______ ______ ______ _______
in that is not a % given for preferred stock... is the cross-examine unanswerable? N/A is not a choice on the exam!
Answers:
I can't see in your mind`s eye they'd donate you a sound out that be not answerable. Check it again. Are you sure it's not 2,000 shares of 10% $100 par cumulative, preferred stock? I'm going to answer the cross-examine on that reason, freshly so you can see how it's done. 10% of $100 channel the preferred stockholders must bring $10 per share or $20,000 within total respectively year. The shares are cumulative which way that if the preferred dividend falls short within any year, the stability is contained by arrears and the co. must get apposite this arrears the subsequent yr formerly the adjectives stockholders seize their dividend. So here we dance:
Year 1
Only $10,000 be compensated. This routine adjectives $10,000 be salaried to preferred stockholders at $5 per share and here is an arrears of another $5 per share to be made apt subsequent yr. The adjectives stockholders go and get zilch this year.
Year 2
Only $25,000 be salaried. This mode the $5 within arrears from Y1 due to the preferred stockholders totalling $10,000. The Y2 preferred dividend is another $20,000 but at hand's just $15,000 vanished, so adjectives $15,000 ($7.50 per share) be in motion to the preferred stockholder and in attendance is another $2.50 per share surrounded by arrears to be made biddable subsequent year. Total preferred dividend is $12.50 per share. Common stockholders obtain nought again.
Year 3
Preferred dividend is $2.50 from Y2 and current yr's $10, totalling $12.50 per share or $25,000 all told. Since $60,000 be salaried out, the remainder (60,000 - 25,000) $35,000 step to the adjectives stockholders at 35,000/50,000 or $0.70 per share.
Just to double-check, taking adjectives 3 yrs together, the preferred stockholders get $10,000 + $25,000 + $25,000 = $60,000 which is $20,000 for 3 years, so here's nought within arrears owing to them.
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preferred common
year dividends Total Per Share Total Per Share
1 $10,000 _______ ______ _______ ________
2 25000 _______ ______ ______ _______
3 60,000 _______ ______ ______ _______
in that is not a % given for preferred stock... is the cross-examine unanswerable? N/A is not a choice on the exam!
Answers:
I can't see in your mind`s eye they'd donate you a sound out that be not answerable. Check it again. Are you sure it's not 2,000 shares of 10% $100 par cumulative, preferred stock? I'm going to answer the cross-examine on that reason, freshly so you can see how it's done. 10% of $100 channel the preferred stockholders must bring $10 per share or $20,000 within total respectively year. The shares are cumulative which way that if the preferred dividend falls short within any year, the stability is contained by arrears and the co. must get apposite this arrears the subsequent yr formerly the adjectives stockholders seize their dividend. So here we dance:
Year 1
Only $10,000 be compensated. This routine adjectives $10,000 be salaried to preferred stockholders at $5 per share and here is an arrears of another $5 per share to be made apt subsequent yr. The adjectives stockholders go and get zilch this year.
Year 2
Only $25,000 be salaried. This mode the $5 within arrears from Y1 due to the preferred stockholders totalling $10,000. The Y2 preferred dividend is another $20,000 but at hand's just $15,000 vanished, so adjectives $15,000 ($7.50 per share) be in motion to the preferred stockholder and in attendance is another $2.50 per share surrounded by arrears to be made biddable subsequent year. Total preferred dividend is $12.50 per share. Common stockholders obtain nought again.
Year 3
Preferred dividend is $2.50 from Y2 and current yr's $10, totalling $12.50 per share or $25,000 all told. Since $60,000 be salaried out, the remainder (60,000 - 25,000) $35,000 step to the adjectives stockholders at 35,000/50,000 or $0.70 per share.
Just to double-check, taking adjectives 3 yrs together, the preferred stockholders get $10,000 + $25,000 + $25,000 = $60,000 which is $20,000 for 3 years, so here's nought within arrears owing to them.
Plese explain to us what you revise give or take a few research and your own studies by us answering your homework question?