Question

York's outstanding stock consists of 70,000 shares of noncumulative 6.0% preferred stock with a $5 par value and also 180,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends. 

Exercise 11-11 Dividends on common and cumulative preferred stock LO C2 

Use the data in Exercise 11-10 to determine the amount of dividends paid each year to each of the two classes of stock assuming that the preferred stock is cumulative. (Round your "Dividend per Preferred Share" answer to 3 decimal places.) 

Answer 1

Dividend distribution

	par value per preferred share	Dividend rate	Dividend per preferred share	Number of preferred share	Preferred dividend
Annual preferred dividend	5	6%	0.30	70000	21000
	Total cash dividend paid	Paid to preferred	Paid to Common	Dividends in arrears at year end
Year 1	9100	9100		11900
Year 2	19000	19000		13900
Year 3	295000	34900	260100	0
Year 4	445000	21000	424000	0
Total	768100	84000	684100	0