Question

Exercise 15-23 Larkspur Company has outstanding 2,500 shares of $100 par, 6% preferred stock and 14,600...

Exercise 15-23

Larkspur Company has outstanding 2,500 shares of $100 par, 6% preferred stock and 14,600 shares of $10 par value common. The following schedule shows the amount of dividends paid out over the last 4 years.

Allocate the dividends to each type of stock under assumptions (a) and (b). Express your answers in per-share amounts using the format shown below. (Round the rate of participation to 4 decimal places, e.g.1.4278%. Round answers to 2 decimal places, e.g. $6.85.)

(a) Preferred, noncumulative,

and nonparticipating

(b) Preferred, cumulative, and

fully participating
Year Paid-out Preferred Common Preferred Common
2015 $11,900 $ $ $ $
2016 $26,200 $ $ $ $
2017 $54,000 $ $ $ $
2018 $76,600 $ $ $ $
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Allocate the dividends to each type of stock under assumptions (a) and (b). Express your answers in per-share amounts using the format shown below.

(a) Preferred, noncumulative,

and nonparticipating

(b) Preferred, cumulative, and

fully participating
Year Paid out Preferred Common Preferred Common
2015 11900 11900/2500 = 4.76 11900/2500 = 4.76
2016 26200 15000/2500 = 6.00 11200/14600 = 0.77 18100/2500=7.24 8100/14600=0.55
2017 54000 15000/2500 = 6.00 39000/14600 = 2.67 15000/2500 = 6.00 39000/14600=2.67
2018 76600 15000/2500 = 6.00 61600/14600 = 4.22 15000/2500 = 6.00 61600/14600=4.22
1 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Exercise 15-21 The outstanding capital stock of Nash Corporation consists of 2,000 shares of $100 par...
Exercise 15-21 The outstanding capital stock of Nash Corporation consists of 2,000 shares of $100 par value, 9% preferred, and 4,600 shares of $50 par value common. Assuming that the company has retained earnings of $81,500, all of which is to be paid out in dividends, and that preferred dividends were not paid during the 2 years preceding the current year, state how much each class of stock should receive under each of the following conditions. (a) The preferred stock...
The outstanding capital stock of Sandhill Corporation consists of 2,200 shares of $100 par value, 7%...
The outstanding capital stock of Sandhill Corporation consists of 2,200 shares of $100 par value, 7% preferred, and 4,900 shares of $50 par value common. Assuming that the company has retained earnings of $88,000, all of which is to be paid out in dividends, and that preferred dividends were not paid during the 2 years preceding the current year, state how much each class of stock should receive under each of the following conditions. (a) The preferred stock is noncumulative...
The outstanding capital stock of Tamarisk Corporation consists of 1,900 shares of $100 par value, 7%...
The outstanding capital stock of Tamarisk Corporation consists of 1,900 shares of $100 par value, 7% preferred, and 4,500 shares of $50 par value common. Assuming that the company has retained earnings of $87,000, all of which is to be paid out in dividends, and that preferred dividends were not paid during the 2 years preceding the current year, state how much each class of stock should receive under each of the following conditions. (a) The preferred stock is noncumulative...
Kerry Company has 850 shares of $100 par value, 9% preferred stock and 11,900 shares of...
Kerry Company has 850 shares of $100 par value, 9% preferred stock and 11,900 shares of $10 par value common stock outstanding. The preferred stock is cumulative and nonparticipating. Dividends were paid in 2013. Since 2013, Kerry has declared and paid dividends as follows: 2014 $ 0 2015 8,850 2016 17,200 2017 21,200 Required: 1. Determine the amount of the dividends to be allocated to preferred and common stockholders for each year 2015 to 2017. If an amount is zero,...
The company has 21,000 shares of $10 par common stock outstanding and 31,000 shares of $100...
The company has 21,000 shares of $10 par common stock outstanding and 31,000 shares of $100 par, 5% noncumulative, nonparticipating preferred stock outstanding. No dividends were declared or paid for the past two years. In the current year, a $315,000 dividend will be paid. What are the dividends per share for preferred and common, respectively? $5.0; $5.2. $10.2; $0.0. $5.0; $7.6 None of these answer choices are correct.
Katie Corporation, based in Liverpool, has 20,000 preferred shares outstanding of no par value $2 dividend...
Katie Corporation, based in Liverpool, has 20,000 preferred shares outstanding of no par value $2 dividend and 40,000 common shares outstanding of no par value. In its first years of operation, the company paid the following dividends: 2010 .............$0 2011 .............$46,000 2012 ............. $78,000 2013 ............. $0 2014 ............. $82,000 Calculate the dividends paid to preferred and common shareholders in each of the five years under the following three independent situations: a. Preferred shares are noncumulative and nonparticipating. b. Preferred...
Pug Corporation has 25,000 shares of $10 par common stock outstanding and 35,000 shares of $100...
Pug Corporation has 25,000 shares of $10 par common stock outstanding and 35,000 shares of $100 par, 5% noncumulative, nonparticipating preferred stock outstanding. Dividends have not been paid for the past two years. This year, a $375,000 dividend will be paid. What are the dividends per share for preferred and common, respectively? Multiple Choice $10.7; $0.0 $5.0; $8.0 $5.0; $5.7 None of these answer choices are correct
Cash Dividends Kerry Company has 1,200 shares of $100 par value, 7% preferred stock and 11,600...
Cash Dividends Kerry Company has 1,200 shares of $100 par value, 7% preferred stock and 11,600 shares of $10 par value common stock outstanding. The preferred stock is cumulative and nonparticipating. Dividends were paid in 2013. Since 2013, Kerry has declared and paid dividends as follows: 2014 $0 2015 9,200 2016 19,800 2017 24,800 1. Determine the amount of the dividends to be allocated to preferred and common stockholders for each year 2015 to 2017. If an amount is zero,...
Sage Company’s ledger shows the following balances on December 31, 2020. 4% Preferred Stock—$10 par value,...
Sage Company’s ledger shows the following balances on December 31, 2020. 4% Preferred Stock—$10 par value, outstanding 18,200 shares $ 182,000 Common Stock—$100 par value, outstanding 32,400 shares 3,240,000 Retained Earnings 684,000 Assuming that the directors decide to declare total dividends in the amount of $333,000, determine how much each class of stock should receive under each of the conditions stated below. One year‘s dividends are in arrears on the preferred stock. (a) The preferred stock is cumulative and fully...
Norton, Inc. has 10,000 shares of 6%, $100 par value, noncumulative preferred stock and 100,000 shares...
Norton, Inc. has 10,000 shares of 6%, $100 par value, noncumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2020, and December 31, 2021. The board of directors declared and paid a $50,000 dividend in 2020. In 2021, $110,000 of dividends are declared and paid. What are the dividends received by the preferred and common shareholders in 2021?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT