Cash Dividends Kerry Company has 1,000 shares of $100 par value, 9% preferred st

Question

Cash Dividends Kerry Company has 1,000 shares of $100 par value, 9% preferred stock and 10,000 shares of $10 par value common stock outstanding. The preferred stock is cumulative and nonparticipating. Dividends were paid in 2006. Since 2006, Kerry has declared and paid dividends as follows: 2007 $0 2008 10,000 2009 20,000 2010 25,000 Required: 1. Determine the amount of the dividends to be allocated to preferred and common stockholders for each year 2008 to 2010. If an amount is zero, enter 0. Year Preferred Dividends Common Dividends 2007 $ $ 2008 $ $ 2009 $ $ 2010 $ $ 2. If the preferred stock had been noncumulative, how much would have been allocated to the preferred and common stockholders each year? If an amount is zero, enter 0. Year Preferred Dividends Common Dividends 2007 $ $ 2008 $ $ 2009 $ $ 2010 $ $

Explanation / Answer

1000 shares at $100 par value so capital of 100,000 at 9% = 9,000 for preference This applies to each year. I think you have left out some information for the remainder of the answer. If nothing was paid in 2007, then in 2008 18,000 would be due etc. Ordinary shares get dividends which depend on profitability - no set amount each year

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