Question

I keept getting the totals for the per share wrong, please help

Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: 20Y1, $80,000; 20Y2, $90,000; 20Y3, $150,000; 20Y4, $150,000; 20Y5, $160,000; and 20Y6, $180,000. During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 250,000 shares of cumulative, preferred 2% stock, $20 par, and 500,000 shares of common stock, $15 par.

Required:

1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of 20Y1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0".

						Preferred Dividends								Common Dividends
Year		Total Dividends				Total				Per Share				Total				Per Share
20Y1		$   80,000				$				$				$				$
20Y2		90,000
20Y3		150,000
20Y4		150,000
20Y5		160,000
20Y6		180,000
										$								$

Answer 1

In case of cumulative preference shares ,any dividend not paid on such shares in any years is carried to future years and are paid in preference to current year preferred and common stock dividend .

preferred dividend per year =par value *dividend rate

            = (250000*20)*2%

            = 5000000*2%

            = 100000

		Preferred dividend		common stock dividend		Preferred dividend in arrear
Year	Dividend	Total	Per share	Total	per share
20Y1	80000	80000	80000/250000=$ .32	0	0	100000-80000=20000
20Y2	90000	90000	90000/250000=$ .36	0	0	100000-90000=10000 current +20000last year =30000
20Y3	150000	30000 arrear +100000 current year =130000	130000/250000 =$ .52 per share	150000-130000=20000	20000/500000 =$ .04 per share	0
20Y4	150000	100000	100000/250000 =$ .40 per share	150000-100000=50000	50000/500000=$ .1 per share	0
20Y5	160000	100000	.40	160000-100000=60000	60000/500000 =$ .12 per share	0
20Y6	180000	100000	.40	180000-100000=80000	80000/500000=$ .16 per share	0
Total	810000	600000	$ 2.4 per share	210000	.42 per share