Question

# Sandpiper Company has 15,000 shares of cumulative preferred 3% stock, \$100 par and 50,000 shares of...

Sandpiper Company has 15,000 shares of cumulative preferred 3% stock, \$100 par and 50,000 shares of \$20 par common stock. The following amounts were distributed as dividends: Year 1 \$112,500 Year 2 22,500 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 (Dividend Per Share) 3.00 1.50 4.50 Common Stock(Dividend Per Share ) 1.35 0 1.35

Explanation;

Year 1 ;

 Total Dividend \$112,500 Preferred Dividend (15,000×3%×\$100) \$45,000 Common Stock Dividend \$675,000

Preferred Stock Dividend Per Share =45,000/15,000 = 3

Common Stock Dividend Per Share = \$675,000/50,000 = 1.35

Year 2

 Total Dividends \$22,500 Preferred Dividend (15,000×3%×\$100) \$45,000 Deficit of Preferred Dividends \$(22,500)

Preferred Stock Dividend Per Share = 22,500/15,000 = 1.5

Year 3

 Total Dividend \$135,000 Preferred Dividend (15,000×3%×\$100)+\$22,500 \$67,500 Common Stock Dividend \$67,500

Preferred Stock Dividend Per Share = 67,500/15,000 =4.5

Common Stock Dividend Per Share =67,500/50,000 =1.35

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