Ritz Company had the following shares outstanding and Retalned Earnings at December 31, 2020: Common shares (500,000 outstanding shares) Preferred shares (8 percent; 21,000 outstanding shares) Retained earnings $500,000 210,090 900,000 On December 31, 2020, the board of directors Is considering the distribution of a cash dividend to the common and preferred shareholders. No dividends were declared during 2018 or 2019. Three Independent cases are assumed: Case A: The preferred shares are non-cumulative; the total amount of 2020 dividends would be $30,000. Case B: The preferred shares are cumulative; the total amount of 2020 dividends would be $30,000. Dividends were not in arrears prior to 2018. Case C: Same as Case B, except the amount is $75,000. Required: 1-a. Compute the amount of dividends, In total, payable to each class of shareholders for each case. Case A Case B Case C Preferred Common Total 1-b. Compute the amount of dividend per share, payable to each class of shareholders for each case. (Round your answers to 2 decimal places.) Case A Case B Case C Preferred Common

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Ritz Company had the following shares outstanding and Retalned Earnings at December 31, 2020:
Common shares (500,000 outstanding shares)
Preferred shares (8 percent; 21,000 outstanding shares)
Retained earnings
$500,000
210,000
900,000
On December 31, 2020, the board of directors Is considering the distribution of a cash dividend to the common and preferred
shareholders. No dividends were declared during 2018 or 2019. Three Independent cases are assumed:
Case A: The preferred shares are non-cumulative; the total amount of 2020 dividends would be $30,000.
Case B: The preferred shares are cumulative; the total amount of 2020 dividends would be $30,000. Dividends were not in arrears
prior to 2018.
Case C: Same as Case B, except the amount is $75,000.
Required:
1-a. Compute the amount of dividends, In total, payable to each class of shareholders for each case.
Case A
Case B
Case C
Preferred
Common
Total
1-b. Compute the amount of dMdend per share, payable to each class of shareholders for each case. (Round your answers to 2
decimal places.)
Case B
Case C
Preferred
Common
Transcribed Image Text:Ritz Company had the following shares outstanding and Retalned Earnings at December 31, 2020: Common shares (500,000 outstanding shares) Preferred shares (8 percent; 21,000 outstanding shares) Retained earnings $500,000 210,000 900,000 On December 31, 2020, the board of directors Is considering the distribution of a cash dividend to the common and preferred shareholders. No dividends were declared during 2018 or 2019. Three Independent cases are assumed: Case A: The preferred shares are non-cumulative; the total amount of 2020 dividends would be $30,000. Case B: The preferred shares are cumulative; the total amount of 2020 dividends would be $30,000. Dividends were not in arrears prior to 2018. Case C: Same as Case B, except the amount is $75,000. Required: 1-a. Compute the amount of dividends, In total, payable to each class of shareholders for each case. Case A Case B Case C Preferred Common Total 1-b. Compute the amount of dMdend per share, payable to each class of shareholders for each case. (Round your answers to 2 decimal places.) Case B Case C Preferred Common
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