Dividend Computations
Not what you're looking for?
Dividend Computations
Reiner Wholesale Merchandise had 20,000 shares of 5%, $20 par value preferred stock and 15,000 shares of $25 par value common stock outstanding throughout 2003. These data apply to each of the independent situations below.
1. Assuming that total dividends declared in 2003 were $35,000 and that the preferred stock is not cumulative. Determine the total of 2003 dividends the common stockholders should receive.
2. Assuming that total dividends declared in 2003 were $80,000 and that the preferred stock is cumulative with two years' preferred dividends in arrears on December 31, 2002. Determine the total 2003 dividends the preferred stockholders should receive.
3. Assuming that total dividends in 2003 were $30,000 and that the preferred stock is cumulative with one year's preferred dividends in arrears on December 31, 2002. Determine the total 2003 dividends the preferred stockholders should receive.
4. Assuming that total dividends declared in 2003 were $40,000, that the cumulative preferred stock was issued on January 1, 2002, and that $10,000 of preferred dividends were declared and paid in 2002. Determine the total 2003 dividends the common stockholders should receive.
5. Assuming that total dividends declared in 2003 were $60,000 and that the cumulative preferred stock dividends have not been paid after 2001. Determine the total 2003 dividends the common stockholders should receive.
6. Assuming that total dividends declared in 2003 were $190,000 and that the cumulative preferred stock received dividends in the following manner: In full up to 1999, $18,000 in 2000, $4,000 in 2001, and $15,000 in 2002. Determine the total 2003 dividends the common stockholders should receive.
Can you help walk me through this problem?
Purchase this Solution
Solution Summary
Solution calculates dividends to common shareholders and preference shareholders under different scenarios.
Solution Preview
Dividend Computations
Reiner Wholesale Merchandise had 20,000 shares of 5%, $20 par value preferred stock and 15,000 shares of $25 par value common stock outstanding throughout 2003. These data apply to each of the independent situations below.
No of preferred shares= 20,000
Par value of preferred shares= $20.00
Rate at which dividend is paid to preferred shares= 5%
Dividned on each preferred share= $1.00 =5.%x$20
No of common shares= 15,000
Dividend preference - preferred shareholders receive dividends on their shares before common shareholders do.
Cumulative preferred: dividends in arrears and current year's dividends must be paid before common dividends can be paid.
1. Assuming that total dividends declared in 2003 were $35,000 and that the preferred stock is not cumulative. Determine the total of 2003 dividends the common stockholders should receive.
Total dividends declared = $35,000
No of preferred shares= 20,000
Dividned on each preferred share= $1.00
No of years for which dividends have to be paid for preference shares= 1
Total dividends to be paid to preference shares= $20,000 =20000x$1.x1
Dividends available for common shareholders= $15,000 =$35,000.-$20,000
Answer: total of 2003 dividends the common stockholders should receive= $15,000
2. ...
Purchase this Solution
Free BrainMass Quizzes
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.
Motivation
This tests some key elements of major motivation theories.
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.