Concept introduction:
Cash dividend:
The Cash dividend is the amount of dividend paid to shareholders in cash. The Cash dividend is declared first and paid later. There are two
Requirement 1:
To calculate:
The amount of preferred dividend for each issue and total amount of dividend.
Concept introduction:
Cash dividend:
The Cash dividend is the amount of dividend paid to shareholders in cash. The Cash dividend is declared first and paid later. There are two journal entries made, one at the time of declaration of dividend and another at the time of payment.
Requirement 2:
To calculate:
The amount of preferred dividend in arrear.
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Cornerstones of Financial Accounting
- Dividends on Preferred and Common Stock Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: Year 1, $24,000; Year 2, $48,000; Year 3, $108,000; Year 4, $138,000; Year 5, $174,000; and Year 6, $210,000. During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 30,000 shares of cumulative preferred 2% stock, $100 par, and 100,000 shares of common stock, $5 par. Required: 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of Year 1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0". Preferred Dividends Common Dividends Total Year Dividends Total Per Share Total Per Share $ 24,000 1.60 x Year 1 %2$ 24,000 Year 2 48,000 48,000…arrow_forwardPreferred stock valuation Fee Founders has perpetual preferred stock outstanding that sells for $40.00 a share and pays a dividend of $4.00 at the end of each year. What is the required rate of return? Round your answer to two decimal places. %arrow_forwardеВook Farley Inc. has perpetual preferred stock outstanding that sells for $44 a share and pays a dividend of $2.00 at the end of each year. What is the required rate of return? Round your answer to two decimal places. %arrow_forward
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