Suppose a corporation has the following shares outstanding: 1. $800,000 in 6%
Scenario 1: As of December 31, 2022, a dividend of $250,000 is declared. Indicate the amount that the preferred shareholders will receive if the share is cumulative and non-participating (cumulative and non-participating). Answer:
Scenario 2: As of December 31, 2022, a dividend of $800,000 is declared. Indicate the amount that the preferred shareholders will receive if the share is cumulative and non-participating up to 11% in total (cumulative and non-participating). Answer:
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- Stockholders' Equity Terminology A list of terms and a list of definitions or examples are presented below. Make a list of the numbers 1 through 12 and match the letter of the most directly related definition or example with each number Definitions and Examples Capitalizes retained earnings. Shares issued minus treasury shares. Emerson Electric will pay a dividend to all persons holding shares of its common stock on December 15, 2019, even if they just bought the shares and sell them a few days later. The accumulated earnings over the entire life of the corporation that have not been paid out in dividends. Common Stock account balance divided by the number of shares issued. The state of Louisiana set an upper limit of 1,000,000 on the number of shares that Gumps Catch Inc. can issue. Shares that never earn dividends. Any changes to stockholders equity from transactions with no owners. A right to purchase stock at a specified future time and specified price. j. A stock issue that requires no journal entry. k. Shares that may earn guaranteed dividends. 1. On October 15, 2019, General Electric announced its intention to pay a dividend on common stock.arrow_forwardHyde Corporations capital structure at December 31, 2018, was as follows: On July 2, 2019, Hyde issued a 10% stock dividend on its common stock and paid a cash dividend of 2.00 per share on its preferred stock. Net income for the year ended December 31, 2019, was 780,000. What should be Hydes 2019 basic earnings per share? a. 7.80 b. 7.09 c. 7.68 d. 6.73arrow_forwardLyon Company shows the following condensed income statement information for the year ended December 31, 2019: Lyon declared dividends of 6,000 on preferred stock and 17,280 on common stock. At the beginning of 2019, 10,000 shares of common stock were outstanding. On May 1, 2019, the company issued 2,000 additional common shares, and on October 31, 2019, it issued a 20% stock dividend on its common stock. The preferred stock is not convertible. Required: 1. Compute the 2019 basic earnings per share. 2. Show the 2019 income statement disclosure of basic earnings per share. 3. Draft a related note to accompany the 2019 financial statements.arrow_forward
- 1. Using the data below, How many shares of preference share capital were issued during 2019? using data number 1, at what average price was the preference share capital issued during 2019? * using data number 1, assuming no other transactions affected the Retained Earnings except for the result of the corporation’s operations, how much is the 2019 profit (net loss)?arrow_forwardRequired:1. Indicate the amount of annual dividend on each issue of the preferred shares by completingthe last column of the above table 2. Assume that there are one year of dividends in arrears at the beginning of 2020, and Essexdeclared total dividends of $40,000 in 2020. What is the amount of dividends that thecommon shareholders will receive in 2020?arrow_forwardShare Transactions In March 2020, FDW Co. received its approved articles of incorporation granting the right to issue an unlimited amount of common shares and 70,000 shares of $5 cumulative preferred shares. 2020 Mar. 1 Issued 40,000 common shares at $21 per share and 20,000 preferred shares at $95 per share. Mar. 27 Gave the corporation's lawyers 2,500 preferred shares for their services in getting the corporation organized. The lawyers valued their services at $240,000. Aug. 31 Issued 20,000 shares of common stock for machinery with a fair value of $460,000 and a book value of $420,000. Dec. 31 Closed the income summary account. Profit was $560,000 for the year. 2021 Feb. 27 Repurchased 20,000 common shares by paying $20.50 per share. Dec. 1 The board of directors declared a $250,000 dividend, payable on December 27th to the December 15th shareholders of record. The corporation maintains preferred and common dividend payable in separate accounts. Dec. 15 Shareholder's date of record.…arrow_forward
- Listed below are the transactions that affected the shareholders' equity of Branch-Rickie Corporation during the period 2021-2023. At December 31, 2020, the corporation's accounts included: Common stock, 112 million shares at $1 par Paid-in capital-excess of par Retained earnings a. November 1, 2021, the board of directors declared a cash dividend of $0.70 per share on its common shares, payable to shareholders of record November 15, to be paid December 1. b. On March 1, 2022, the board of directors declared a property dividend consisting of corporate bonds of Warner Corporation that Branch-Rickie was holding as an investment. The bonds had a fair value of $2.8 million, but were purchased two years previously for $2.4 million. Because they were intended to be held to maturity, the bonds had not been previously written up. The property dividend was payable to shareholders of record March 13, to be distributed April 5. c. On July 12, 2022, the corporation declared and distributed a 4 %…arrow_forwardThe following is information related to the shares of the JFC Company at the beginning of 2018 (during the year these amounts did not change): Preferred shares (par value $ 10.6%) $ 800,000 Common Shares 3,200,000 No dividends were declared for the years 2018 and 2019. However, in 2020, JFC declared a total dividend (for both types of shares) of $ 300,000. Determine the amount preferred shareholders will receive if the share is cumulative and nonparticipating. Select one: to. $ 96,000 b. $ 48,000 c. $ 150,000 d. $ 144,000arrow_forwardListed below are the transactions that affected the shareholders' equity of Branch-Rickle Corporation during the period 2021-2023. At December 31, 2020, the corporation's accounts Included: Common stock, 112 million shares at $1 par Paid-in capital-excess of par Retained earnings a. November 1, 2021, the board of directors declared a cash dividend of $0.70 per share on its common shares, payable to shareholders of record November 15, to be paid December 1. b. On March 1, 2022, the board of directors declared a property dividend consisting of corporate bonds of Warner Corporation that Branch-Rickle was holding as an Investment. The bonds had a fair value of $2.8 million, but were purchased two years previously for $2.4 million. Because they were intended to be held to maturity, the bonds had not been previously written up. The property dividend was payable to shareholders of record March 13, to be distributed April 5. c. On July 12, 2022, the corporation declared and distributed a 4%…arrow_forward
- Copley Corporation is preparing their financial statements for the year ending February 28, 2022. Copley Corporation has two categories of stock: Preferred and Common. The preferred stock is structured such that the holders of the preferred stock may convert one share of preferred stocks into one share of common stock if the market price of the common stock is greater than $1,000. As of February 28, 2022, the market price of the common stock had never reached $1,000. In the preparation of the 2/28/22 Income Statement Copley’s staff accountant was calculating the Basic and Diluted EPS. While calculating the diluted EPS the staff accountant is unsure of whether to include the potential impact of the convertible preferred stock since the trigger conversion price had not been met as of 2/28/22. Based upon your response above calculate Basic & Diluted EPS using the following information: (round all calculations to the second decimal place… do not use dollar signs in your answer)…arrow_forwardCopley Corporation is preparing their financial statements for the year ending February 28, 2022. Copley Corporation has two categories of stock: Preferred and Common. The preferred stock is structured such that the holders of the preferred stock may convert one share of preferred stocks into one share of common stock if the market price of the common stock is greater than $1,000. As of February 28, 2022, the market price of the common stock had never reached $1,000. In the preparation of the 2/28/22 Income Statement Copley’s staff accountant was calculating the Basic and Diluted EPS. While calculating the diluted EPS the staff accountant is unsure of whether to include the potential impact of the convertible preferred stock since the trigger conversion price had not been met as of 2/28/22. Accounting Issue: In the calculation for Diluted EPS should Copley Corporation include the impact of the convertible preferred stock since the trigger conversion price of $1,000 had not…arrow_forwardUse the following information to answer the questions 34 and 35. On January 1, 2020, Falcon Corporation had 40,000 shares of $10 par value common stock issued and outstanding. All 40,000 shares had been issued in a prior period at $17 per share. On February 1, 2020, Falcon purchased 3,100 shares of treasury stock for $19 per share and later sold the treasury shares for $26 per share on March 2, 2020. 34 What amount of gain due to these treasury stock transactions should be reported on the income statement for the year ended December 31, 2020? A) $ 21,700 B) $ 3,100 C) $ 2,170 D) None of the above 35 The entry to record the sale of the treasury shares on March 2, 2020 is A) Cash $ 26,000 Common Stock Retained Earnings $ 24,000 $Jigs 2,000 Treasury Stock, Common $ 26,000 Treasury Stock, Common Gain on Treasury Stock, Common $ Treasury Stock, Common Paid-in Capital, Treasury Stock B) Cash C) Cash D) Cash E) None of the above Retained Earnings bome 6,000 $ $ $ $ $ $ $ · LA (8) 19,000 7,000…arrow_forward
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