Question

York’s outstanding stock consists of 90,000 shares of noncumulative 7.5% preferred stock with a $5 par value and also 270,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends:
  

2015 total cash dividends	$23,000
2016 total cash dividends	31,700
2017 total cash dividends	235,000
2018 total cash dividends	385,000
Determine the amount of dividends paid each year to each of the two classes of stockholders: preferred and common. Also compute the total dividends paid to each class for the four years combined.

Answer 1

Answer:-

Years	Total cash dividends paid	Paid to Preferred	Paid to Common	Dividends in Arrears
	(a)	(b)	(c=a-b)
2015	$23000	$23000	0	0
2016	$31700	$31700	0	0
2017	$235000	$33750	$201250	0
2018	$385000	$33750	$351250	0
Total	674700	122200	552500

Explanation:-

	Par value per Preferred Share	Dividend Rate	Dividends per Preferrd share	No. of Preferred shares	Preferred Dividends
	(a)	(b)	(c=a*b)	(d)	(e=c*d)
Annual preferrd dividend	$5.00	7.50%	$0.375	90000	$33750