Required Information Use the following information for the Exercises below The f

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Required Information Use the following information for the Exercises below The following Information applies to the questions displayed below York's outstanding stock consists of 65,000 shares of noncumulative 6.0% preferred stock with a $5 par value and also 220,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and pald the following total cash dividends: 2815 total cash dividends 2816 total cash dividends 2317 total cash dividends 2018 total cash dividends 5 9, 38e 17,580 218,880 360,89e Exercise 13-8 Dividends on common and noncumulative preferred stock LO C2 Determine the amount of dividends pald each year to each of the two classes of stockholders: preferred and common. Also compute the total dividends pald to each class for the four years combined. (Round your "Dlvidend per Preferred Share" answers to 3 decimal places.) per ividend per Number o Preferred Share Preferred Preferred Shares Dividend Dividend Rate Preferred Share Annual Preferred Dividend: Dividends in Arrears at year-end Paid to Total Cash Dividend Paid Preferred Paid to Common 2015 2016 2017 2018 Total: 9,300 17.500 210.000 360,000 596,800

Explanation / Answer

Ans. Calculation of Total dividends paid to each class of shareholder

Total 6%preference share capital (65000X5) = $325000

Dividends per annuam for Preference share holder = 325000X.06 =$ 19500

Dividend per preference share = 19500/65000 = $.30 per share

Computation of dividend paid each year (value in $)

Yrs           Total dividends                Paid to preferred        paid to common    Dividend in arrear for Preference

                    (1)      (2) (2-1)                                            

2015            9300                               9300                           0                        (19500-9300) = 10200    

2016            17500                            17500 0    (19500-17500) = 2000 = 12200

2017            210000                          31700                       178300                       0 (paid with arrear)

2018           360000                           19500                       340500 0

Total           596800                           78000                       518800                       0

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