Question

Required information [The following information applies to the questions displayed below.] York's outstanding stock consists of 90,000 shares of noncumulative 6.5% preferred stock with a $5 par value and also 100,000 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: 2015 total cash dividends 2016 total cash dividends 2017 total cash dividends 2018 total cash dividends $ 18,100 27,200 255,000 405,000 Determine the amount of dividends paid each year to each of the two classes of stockholders: preferred and common. Also compute the total dividends paid to each class for the four years combined. (Round your "Dividend per Preferred Share" answers to 3 decimal places.) Par Value per Preferred Share Dividend Rate Dividend per Preferred Share Number of P referred Shares Preferred Dividend Annual Preferred Dividend: Total Cash Dividend Paid Paid to Preferred Paid to Common Dividends in Arrears at year-end $ 2015 2016 2017 2018 Total: 18,100 27,200 255,000 405,000 705,300 $ $ 0 $ 0

Answer 1

Ans.

	Par Value Per Preferred Share	Dividend Rate	Dividend Per Preferred Share	Number of Preferred Shares	Preferred Dividend
Annual Preferred Dividend:	$5.00	6.5 %	0.325	90,000	$29,250
	Total Cash Dividend Paid	Paid to Preferred	Paid to Common	Dividends in Arrears at year-end
2015	$18,100	$18,100
2016	$27,200	$27,200
2017	$255,000	$29,250	$225,750
2018	$405,000	$29,250	$375,750
Total	$705,300	$103,800	$601,500

Note:-

		Non-Cumulative Preferred stock	Common Stock
	2015($18,100 Paid) Preferred	$18,100
Common-remainder			0
Total for the year		$18,100	0
	2016 ($27,200 Paid) preferred	$27,200	0
Common-remainder			0
Total for the year		$27,200	0
	2017 ($255,000) paid preferred	$29,250	0
Common-remainder			$225,700
Total for the year		$29,250	$225,700

	2018($405,000 Paid) Preferred	$29,250
Common-remainder			$375,750
Total for the year		$29,250	$375,750
Total for four years		$103,800

Total for four year for common stock = $601,500

The holder of the noncumulative preferred stock are entitled to no more than $29,250 of dividends in any one year (6.5% x $5 x 90,000 shares)