
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
thumb_up100%

Transcribed Image Text:%3D
384,000
7,200,000
71,684,000
Elosing
(net income)
Dec. 31
June 30
Sept. 30
69,000
69,000
Dividend
3,780,000
Dividend
Dec. 31
Dividend
69,000
1,008.000
14,879,000
Dec. 31
Balance
e authorized. There are
Julv 31, the end of the
Obj. 6
e following results for
Problems: Series A
Obj. 2
PR 12-1A 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: 20Y1, $80,000; 20Y2,
$90,000; 20Y3, $150,000; 20Y4, $150,000; 20Y5, $160,000; and 20Y6, $180,000. During the entire
period ended December 31 of each year, the outstanding stock of the company was composed
of 250,000 shares of cumulative, preferred 2% stock, $20 par, and 500,000 shares of common
stock, $15 par.
$59,650,000
8,160,000
V 1. Common
dividends in 20Y3:
$20,000
1,000,000
2,600,000
13.
EXCEL TEMPLATE
Obj. 6
sheet prepared as of
SHOW ME HOW
Instructions
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 20Y1. Summarize
the data in tabular form, using the following column headings:
Preferred Dividends
Common Dividends
Total
Dividends
Year
Total
Per Share
Total
Per Share
20Υ1
$ 80,000
20Y2
90,000
10,500,000
20Υ3
150.000
96,700,000
20Υ4
150.000
1,755,000
20Y5
160,000
430,000
20Y6
180,000
09,385,000
2. Determine the average annual dividend per share for each class of stock for the six-year period.
7,655,000
3. Assuming a market price per share of $25.00 for the preferred stock and $17.50 for the common
stock, determine the average annual percentage return on initial shareholders' investment, based
on the average annual dividend per share (a) for preferred stock and (b) for common stock.
300,000
7340,000
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 3 steps with 2 images

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 10arrow_forwardExercise 9-12A (Algo) Ratio analysis LO 9-5 During Year 3, Baird Corporation reported after-tax net income of $3,640,000. During the year, the number of shares of stock outstanding remained constant at 9,580 of $100 par, 8 percent preferred stock and 400,000 shares of common stock. The company's total stockholders' equity is $19,800,000 at December 31, Year 3. Baird Corporation's common stock was selling at $53 per share at the end of its fiscal year. All dividends for the year have been paid, including $4.70 per share to common stockholders. Required a. Compute the earnings per share. (Round your answer to 2 decimal places.) b. Compute the book value per share of common stock. (Round your answeryto 2 decimal places.) c. Compute the price-earnings ratio. (Round intermediate calculations and final answer to 2 decimal places.) d. Compute the dividend yield. (Round your percentage answer to 2 decimal places. (i.e., 0.2345 should be entered as 23.45).) a. Earnings per share b. Book value…arrow_forward6 Company A has significant influence by owning 50,000 of the 100,000 shares of Company B common stock. During the current year, Company B earns $700,000 and pays cash dividends of $400,000. Which amount represents the resulting increase in the Equity Investment account? O $150,000 O $200,000 O $350,000 O $550,000arrow_forward
- h1arrow_forwardProblem 4 (Allocation of Cash Dividends to Preference and Ordinary Shareholders) The Company has the same capital structure (except for retained earnings) for the past five year, see details below: 6% Preference Share Capital, 80,000 shares issued and outstanding, P 50 par P4,000,000 Ordinary Share Capital, 200,000 shares issued and outstanding, P 30 par 6,000,000 Retained Earnings 5,000,000 No dividends were paid prior to 2020 for two years. On December 10, 2020, the Company declared P 1,500,000 as cash dividends to shareholders of record of December 21, 2020, payable on January 5, 2021. Requirements: Prepare all the necessary journal entries to record the dividend transactions. Allocate the dividends between ordinary shareholders and preference shareholders if: Case A. Preference share capital is NON-CUMULATIVE and…arrow_forwardaaarrow_forward
- Brief Exercise 10-50Preferred and Common Stock Dividends Brookshed Corporation has a single class of common stock and a single class of cumulative preferred stock. The cumulative preferred stock requires the corporation to pay an annual dividend of $11,000 to preferred stockholders. On January 1, 2019, Brookshed's preferred dividends were 1 year in arrears, which means that Brookshed declared neither preferred nor common dividends in 2018. During the next 3 years (2019–2021), Brookshed's board of directors determined they would be able to pay $17,000, $18,000, and $21,000, respectively. Required: Show how these anticipated payments will be split between preferred and common stockholders. If an amount box does not require an entry, leave it blank and if the answer is zero, enter "0".arrow_forwardQUESTION 25 A firm has issued cumulative preferred stock with a $100 par value and a 12 percent annual dividend: For the past two years, the board of directors has decided not to pay a dividend At the end of the current year, the preferred stockholders must be paid prior to paying the common stockholders OA 50/share O&$12/share OC124/share OD$36/sharearrow_forwardQUESTION 3 CER Corporation has 8.75 million shares of common stock outstanding, 215,000 sharesof RM6 annual dividend preferred stock outstanding, and 105,000 of 7.5% semi-annualbond outstanding. The common stock is currently sells for RM34 per share and has abeta of 1.25, the preferred stock currently sells for RM91 per share, and the bonds have15 years to maturity and sell for 93% of par. The market risk premium is 8.5%, T-bills areyielding 5%, and corporate tax rate is 35%. Calculate the following:(a) Firm’s market value capital structure.(b) Cost of equity.(c) Cost of preferred stock Thank youarrow_forward
- A1arrow_forwardDo not give answer in imagearrow_forwardCHP#11_6 Dividend Distribution Ryan Corporation began business on March 1, 2016. At that time, it issued 20,000 shares of $60 par value, seven percent cumulative preferred stock and 100,000 shares of $5 par value common stock. Through the end of 2018, there had been no change in the number of preferred and common shares outstanding. Required a. Assume that Ryan declared dividends of $0 in 2016, $195,000 in 2017, and $200,000 in 2018. Calculate the total dividends and the dividends per share paid to each class of stock in 2016, 2017, and 2018. Round to two decimal places. b. Assume that Ryan declared dividends of $0 in 2016, $90,000 in 2017, and $190,000 in 2018. Calculate the total dividends and the dividends per share paid to each class of stock in 2016, 2017, and 2018. Round to two decimal places.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education


Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,

Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON

Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education

Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education