Question

Seacrest Company has 30,000 shares of cumulative preferred 1% stock, $150 par and 50,000 shares of $10 par common stock. The following amounts were distributed as dividends:

Year 1	$90,000
Year 2	36,000
Year 3	135,000

Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'.

	Year 1	Year 2	Year 3
Preferred stock (Dividends per share)	$	$	$
Common stock (Dividends per share)	$	$	$

Answer 1

Solution

	1st Year	2nd Year	3rd Year
Preferred stock	$                    1.50	$                  1.20	$                  1.80
Common stock	$                    0.90	$                      -	$                  1.62

Working

	Par Value per Preferred share	Dividend rate	Dividend per preffred share	Number of preffered shares	Preffered Dividend
Annual Prefrred Dividend:	150	1.00%	$               1.500	30000	$           45,000.00
Year	Total Cash dividend Paid	Paid to Preferred	Paid to common	Dividends in arear at year-end
1	$         90,000.00	$       45,000.00	$ 45,000	$ 0
2	$         36,000.00	$       36,000.00	$ 0	$ 9,000
3	$      1,35,000.00	$       54,000.00	$ 81,000