Yorks outstanding stock consists of 85000 shares of noncumul

York’s outstanding stock consists of 85,000 shares of noncumulative 7.0% preferred stock with a $5 par value and also 260,000 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:
  

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. (Round your \"Dividend per Preferred Share\" answers to 3 decimal places.)

2015 total cash dividends	$	19,100
2016 total cash dividends		27,700
2017 total cash dividends		230,000
2018 total cash dividends		380,000

Solution

Calculation of total dividend paid to each class of shares each year Year Total Dividend Paid to Preferred stockholders Paid to Common stockholders 2015 $19,100.00 $19,100.00 $0.00 2016 $27,700.00 $27,700.00 $0.00 2017 $230,000.00 $29,750.00 $200,250.00 2018 $380,000.00 $29,750.00 $350,250.00 Calculation of dividend per share Year Dividend per Preferred share (85000 outstanding shares) Dividend per Common share [260000 outstanding shares] 2015 $0.225 $0.000 2016 $0.326 $0.000 2017 $0.350 $0.770 2018 $0.350 $1.347 Working Preferred dividend payable per year = [85000 shares * $5] * 7% = $29,750 As the preferred shares are non cumulative , the company is not liable to pay unpaid dividend to preferred stockholders.