FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The books of a company carried the following account balances as of 12/31/20.
Cash. $181,000
Common Stock (no-par value 305,000 share issued) 1,525,000
Paid in Capital in Excess of Par -Preferred stock 144,000
The company decided not to pay any dividend in 2020
The board at the 2021 annual meeting declared "The current year dividend shall be 6% on the preferred and $0.40 per share on the common. THe dividends in arrears shall be paid by issuing 1,510 shares of treasury stock. At the date of declaration the preferred is selling at $83 per share and the common at $12 per share. Net income is estimated at $80,600
Prepare the
for preferred dividends in arrears
for preferred current year dividend
for common share dividend
Could the company give the preferred stockholders 2 years dividends and common stockholders a 40 cents per share dividend all in cash?
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