Exercise 18-10 Effect of cumulative, nonparticipating preferred stock on dividen

Question

Exercise 18-10 Effect of cumulative, nonparticipating preferred stock on dividends-3 years LO18-4 The shareholders' equity of WBL Industries includes the items shown below. The board of directors of WBL dedared cash dhidends of S6 miltlion, $16 miltion, and $190 million in its first three years of operation 2016, 20 in Common stock $140 Paid-in capital excess of par, common 960 Preferred stock 5% 280 Paid-in capital excess of par, preferred 680 Defermine the amount of dividends to be paid to preferred and common sharholders in each of the three years, assuming that the preferred stock is cumulative and nonpartcipating E millions (i.e, 10,000,000 should be entered as 10).) oiut answers in Preferred DividendAnnual Preferred Dividend Rate Stock Annual Preferred Dividend ds in paid to Paio ted Commonyear Arrears at year-end Dividend Paid Preferred Common 2016 2017 2018 Total

Explanation / Answer

CALCULATE AMOUNT OF DIVIDEND :

Par value preferred stock dividend rate Annual dividend Annual preferred dividend 280 5% 14 Total dividend paid paid to preferred Paid to common Dividend in arrear at year end 2016 6 6 8 2017 16 16 6 2018 190 20 170 Total 212 42 170

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