Need assistanace with 1 a&b The records of Hoffman Company reflected the followi

Question

Need assistanace with 1 a&b

The records of Hoffman Company reflected the following balances in the stockholders' equity accounts at December 31, 2015 Common stock, par $12 per share, 45,000 shares outstanding Preferred stock, 8 percent, par $20 per share, 6,910 shares outstanding. Retained earnings, $230,000. On January 1, 2016, the board of directors was considering the distribution of a $63,000 cash dividend. No dividends were paid during 2014 and 2015. Required: 1. Determine the total and per-share amounts that would be paid to the common stockholders and to the preferred stockholders under two independent assumptions: a. The preferred stock is noncumulative. (Round "Per Share" to 2 decimal places and rest to the nearest dollar amount) Total Per Share Paid to the Preferred Stockholders Paid to the Common Stockholders b. The preferred stock is cumulative. (Round "Per Share" to 2 decimal places and rest to the nearest dollar amount.) Total Per Share Paid to the Preferred Stockholders Paid to the Common Stockholders

Explanation / Answer

Dividend distribution :

a) Preferred Stock is noncumulative :

Dividend distribution :

b) Preferred Stock is cumulative :

Total Per Share paid to preferred Stockholders (6910*20*8%) 11056 1.60 paid to Common stockholders (63000-11056) 51944 1.15

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