Ihac
Sep 29, 2012, 05:56 PM
Accounting
The records of Hollywood Company reflected the following balances in the stockholders’ equity accounts at December 31, 2010:
Common stock, par $11 per share, 38,000 shares outstanding
Preferred stock, 11 percent, par $9 per share, 6,000 shares outstanding
Retained earnings, $227,000
On September 1, 2011, the board of directors was considering the distribution of a $85,000 cash dividend. No dividends were paid during the previous two years. You have been asked to determine dividend amounts under two independent assumptions:
a.The preferred stock in noncumulative.
b.The preferred stock in cumulative.
Required:
Determine the total and per share amounts that would be paid to the common stockholders and to the preferred stockholders under the two independent assumptions. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)
Non Cumulative PREFERRED COMMON
TOTAL 5940 97060 (85000-5940)
PER SHARE 5940/6000=1 79060/38000=2.00
CUMULATIVE?
TOTAL?
I have been working on this problem for severel hours. I tried rereading the book, several times, I also tried going online for examples. I just do not know how to do this. Please help. I just want to understand how to do this. I need the steps.
Thank you
B
The records of Hollywood Company reflected the following balances in the stockholders’ equity accounts at December 31, 2010:
Common stock, par $11 per share, 38,000 shares outstanding
Preferred stock, 11 percent, par $9 per share, 6,000 shares outstanding
Retained earnings, $227,000
On September 1, 2011, the board of directors was considering the distribution of a $85,000 cash dividend. No dividends were paid during the previous two years. You have been asked to determine dividend amounts under two independent assumptions:
a.The preferred stock in noncumulative.
b.The preferred stock in cumulative.
Required:
Determine the total and per share amounts that would be paid to the common stockholders and to the preferred stockholders under the two independent assumptions. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)
Non Cumulative PREFERRED COMMON
TOTAL 5940 97060 (85000-5940)
PER SHARE 5940/6000=1 79060/38000=2.00
CUMULATIVE?
TOTAL?
I have been working on this problem for severel hours. I tried rereading the book, several times, I also tried going online for examples. I just do not know how to do this. Please help. I just want to understand how to do this. I need the steps.
Thank you
B