Question

Seacrest Company has 10,000 shares of cumulative preferred 3% stock, $150 par and 50,000 shares of $25 par common stock. The following amounts were distributed as dividends:

Year 1	$67,500
Year 2	18,000
Year 3	135,000

Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'.

	Year 1	Year 2	Year 3
Preferred stock (Dividends per share)	$	$	$
Common stock (Dividends per share

Answer 1

Annual preferred dividends = 10000*150*3%= $45000
Year 1:
Preferred stock (Dividends per share)	4.5	=45000/10000
Common stock (Dividends per share)	0.45	=(67500-45000)/50000
Year 2:
Preferred stock (Dividends per share)	1.8	=18000/10000
Common stock (Dividends per share)	0
Year 3:
Preferred stock (Dividends per share)	7.2	=(27000+45000)/10000
Common stock (Dividends per share)	1.26	=(135000-45000-27000)/50000