Cash Dividends Kerry Company has 1,500 shares of $100 par value, 7% preferred st

Question

Cash Dividends

Kerry Company has 1,500 shares of $100 par value, 7% preferred stock and 11,900 shares of $10 par value common stock outstanding. The preferred stock is cumulative and nonparticipating. Dividends were paid in 2012. Since 2012, Kerry has declared and paid dividends as follows:

Required:

1. Determine the amount of the dividends to be allocated to preferred and common stockholders for each year 2014 to 2016. If an amount is zero, enter "0".

2. If the preferred stock had been noncumulative, how much would have been allocated to the preferred and common stockholders each year?

Explanation / Answer

Annual preferred dividends = 1500*100*7%= $10500 1 Year Preferred Dividends Common Dividends 2014 12000 0 2015 19500 2800 2016 10500 17200 2 Year Preferred Dividends Common Dividends 2014 10500 1500 2015 10500 11800 2016 10500 17200

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