Holt Company paid out cash dividends at the end of each year as follows: Assume
ID: 2582873 • Letter: H
Question
Holt Company paid out cash dividends at the end of each year as follows:
Assume that Holt had 270,000 common shares and 11,000, $7, non-cumulative preferred shares. How much cash would be paid out in 2014, 2015, and 2016 to each class of shares?
Assume that Holt had 100,000 common shares, and 5,000, $5, cumulative preferred shares that were three years in arrears as at January 1, 2014. How much cash would be paid out in 2014, 2015, and 2016 to each class of shares?
Year Dividends 2014 $274,000 2015 $300,000 2016 $391,000 Year Preferred Common Total 2014 $ 2015 $ 2016 $Explanation / Answer
preferred Common total Year 2014 77,000 197000 274,000 2015 77,000 223000 300,000 2016 77,000 314000 391,000 11000*7 = $77,000 preferred stock dividend preferred Common total Year 2014 100,000 174000 274,000 2015 25,000 275,000 300,000 2016 25,000 366000 391,000 preferred stock dividend = 5000*$5 25000 Arrears 25000*3 = 75,000 total dividend 100000 to preferred stockholders
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