
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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question 8 attached in ss below thanks fro help
aprpeciate it
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Transcribed Image Text:Alloy Garde Corporation has 90,000 shares of $1.80 preferred stock outstanding in addition to its common stock. The $1.80 designation means that the preferred stockholders receive an annual cash dividend of $1.80 per share.
In 2021, Alloy Garde declares an annual dividend of $500,000. The allocation to preferred and common stockholders is:
(Click the icon to view the data.)
Read the requirements.
1. How much in dividends must Alloy Garde declare each year before the common stockholders receive any cash dividends for the year?
Dividends the company must declare each year before the common stockholders receivable any cash dividends =
Data table
Preferred dividend (90,000 shares * 1.80 per share)
Common dividend (remainder: $500,000 - $162,000)
Total dividend
Print
Done
$ 162,000
338,000
$ 500,000
X
Requirements
Answer these questions about Alloy Garde's cash dividends.
1. How much in dividends must Alloy Garde declare each year before the common stockholders receive any
cash dividends for the year?
2. Suppose Alloy Garde declares cash dividends of $675,000 for 2021. How much of the dividends goes to
preferred shareholders? How much goes to common shareholders?
3. Is Alloy Garde's preferred stock cumulative or noncumulative? How can you tell?
4. Alloy Garde passed the preferred dividend in 2020 and 2021. Then in 2022, Alloy Garde declares cash
dividends of $1,600,000. How much of the dividends goes to preferred shareholders? How much goes to
common shareholders?
Print
Done
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