The stockholders’ equity section of Joshua Company shows the following on December 31, 2022:   Preferred stock, 4%, $50 par value, 5,000 shares outstanding          $250,000             Common stock, $5 par value, 80,000 shares outstanding                    400,000             Paid-in capital in excess of par, common stock                                   200,000             Retained earnings                                                                                 210,000               Total stockholders’ equity                                                              $1,060,000     Required:   Assume that the corporation has determined to pay out $70,000 in dividends at December 31, 2022.  The last time that dividends were paid was on December 31, 2020.  Calculate the amount of dividends that would be paid to preferred shareholders and the amount that would be paid to common shareholders under the following independent situations:   The preferred stock is noncumulative and nonparticipating.             2.The preferred stock is cumulative and nonparticipating.               3. The preferred stock is cumulative and fully participating.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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  1. The stockholders’ equity section of Joshua Company shows the following on December 31, 2022:

 

Preferred stock, 4%, $50 par value, 5,000 shares outstanding          $250,000

            Common stock, $5 par value, 80,000 shares outstanding                    400,000

            Paid-in capital in excess of par, common stock                                   200,000

            Retained earnings                                                                                 210,000

 

            Total stockholders’ equity                                                              $1,060,000

 

 

Required:

 

Assume that the corporation has determined to pay out $70,000 in dividends at December 31, 2022.  The last time that dividends were paid was on December 31, 2020.  Calculate the amount of dividends that would be paid to preferred shareholders and the amount that would be paid to common shareholders under the following independent situations:

 

  1. The preferred stock is noncumulative and nonparticipating.

 

 

 

 

 

 

2.The preferred stock is cumulative and nonparticipating.

 

 

 

 

 

 

 

3. The preferred stock is cumulative and fully participating.

 

 

 

 

 

 

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