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    brandie77065's Avatar
    brandie77065 Posts: 1, Reputation: 1
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    #1

    Jul 13, 2009, 11:12 AM
    Accounting
    Dividend Allocations

    Situation 1 Akimoto Company has the following stock outstanding

    Common Stock
    50,000 shares
    $1 par value

    Preferred Stock
    5,000 shares
    $40 par, $ 2 dividend

    The amount available for dividends this year is $40,000. Prepare the dividend allocation between the preferred and common stocks.

    I really need help on this please.

    Brandie
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
    		  
    #2

    Jul 13, 2009, 01:08 PM

    On Preferred stock it tells you that dividends are $2 a share.

    Take the $2 times the number of shares issued and outstanding.

    The common stock allocation is the total amount less the dividends used for the preferred stock
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