Question

E 11-1A. Dividend Distribution Lakeside Company has the following shares outstanding: 20,000 shares of $50 par...

E 11-1A. Dividend Distribution
Lakeside Company has the following shares outstanding: 20,000 shares of $50 par value, six percent cumulative preferred stock and 80,000 shares of $10 par value common stock.  The company declared cash dividends amounting to $160,000.
a. If no dividends in arrears on the preferred stock exist, how much in total dividends, and in dividends per share, is paid to each class of stock?
b. If one year of dividends in arrears exist on the preferred stock, how much in total dividends, and in dividends per share, is paid to each class of stock?
a. Preferred Shares Total Dividend
x Par value - Total Preferred Dividend
x Dividend % Total Common Dividend
Total Preferred Dividend Dividend per share
Dividend per share
b. Preferred Shares Total Dividend
x Par value - Total Preferred Dividend
x Dividend % Total Common Dividend
Current Preferred Dividend Dividend per share
Dividends in Arrears
Total Preferred Dividend
Dividend per share
that is all the question gives me

Homework Answers

Answer #1

a) Calculate following

Preferred shares 20000 Total Dividend 160000
x Par value 50 - Total Preferred Dividend -60000
x Dividend % 6% Total Common Dividend 100000
Total Preferred Dividend 60000 Dividend per share 100000/80000 = 1.25
Dividend per share 60000/20000 = 3

b) Calculate following

Preferred shares 20000 Total Dividend 160000
x Par value 50 - Total Preferred Dividend -120000
x Dividend % 6% Total Common Dividend 40000
Current Preferred Dividend 60000 Dividend per share 40000/80000 = 0.50
Dividend in arrears 60000
Total preferred dividend 120000
Dividend per share 120000/20000 = 6
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