Preferred Stock 5 11 Par Value 5500 shares authorized 4000 s

Preferred Stock- 5% $11 Par Value 5,500 shares authorized 4,000 shares issued and outstanding

Common Stock - $.20 Par Value 2,000,000 shares authorized, 1,650,000 shares issued and outstanding

Requirement 1.

Sapphire declares cash dividends of $28,000 for 2018.

How much of the dividends goes to preferred? stockholders? How much goes to common? stockholders? ?(Complete all input boxes. Enter? \"0\" for any zero? amounts.)

Sapphire dividend would be divided between preferred and common stockholders in this? manner:

Total Dividend

Dividend to preferred stockholders:

Dividend in arrears

Current year dividend

Total dividend to preferred stockholders

Dividend to common stockholders

Requirement 2. Assume the preferred stock is cumulative and Sapphire passed the preferred dividend in 2016 and 2017

In 2018 the company declares cash dividends of $35,000.

How much of the dividend goes to preferred? stockholders? How much goes to common? stockholders? ?(Complete all input boxes. Enter? \"0\" for any zero? amounts.)

Sapphire dividend would be divided between preferred and common stockholders in this? manner:

Total Dividend

Dividend to preferred stockholders:

Dividend in arrears

Current year dividend

Total dividend to preferred stockholders

Dividend to common stockholders

Requirement 3. Assume the preferred stock is noncumulative and Sapphire passed the preferred dividend in 2016 and 2017

In 2018 the company declares cash dividends of $35,000.

How much of the dividend goes to preferred? stockholders? How much goes to common? stockholders? ?(Complete all input boxes. Enter? \"0\" for any zero? amounts.) Sapphire dividend would be divided between preferred and common stockholders in this? manner:

Total Dividend

Dividend to preferred stockholders:

Dividend in arrears

Current year dividend

Total dividend to preferred stockholders

Dividend to common stockholders

Total Dividend
Dividend to preferred stockholders:
Dividend in arrears
Current year dividend
Total dividend to preferred stockholders
Dividend to common stockholders

Solution

Answers

No.

Par Value

Amount

Per Year dividend

[A]

[B]

[C = A x B]

[D = C x 5%]

Preferred Stock issued

4000

$                   11.00

$                        44,000.00

$        2,200.00

Requirement 1

A

Total Dividend

$          28,000.00

Dividend to preferred Stockholders:

B

Dividend in Arrears

$                         -  

C

Current Year dividend

$            2,200.00

D = B+C

Total dividend to preferred stockholders

$             2,200.00

E = A - D

Dividend to common stockholders

$          25,800.00

Requirement 2

A

Total Dividend

$          35,000.00

Dividend to preferred Stockholders:

B

Dividend in Arrears [2200 + 2200]

$            4,400.00

C

Current Year dividend

$            2,200.00

D = B+C

Total dividend to preferred stockholders

$             6,600.00

E = A - D

Dividend to common stockholders

$          28,400.00

Requirement 3

A

Total Dividend

$          35,000.00

Dividend to preferred Stockholders:

B

Dividend in Arrears

$                         -  

C

Current Year dividend

$            2,200.00

D = B+C

Total dividend to preferred stockholders

$             2,200.00

E = A - D

Dividend to common stockholders

$          32,800.00

	No.	Par Value	Amount	Per Year dividend
	[A]	[B]	[C = A x B]	[D = C x 5%]
Preferred Stock issued	4000	$                   11.00	$                        44,000.00	$        2,200.00