Question

Sanchez Co. has 35,000 shares of 1% preferred stock of $100 par and 98,000 shares of $50 par common stock. The following amounts were distributed as dividends:

Year 1: $566,000

Year 2: $451000

Year 3: $511,000

Determine the dividends per share for preferred and common stock for each year. Round the dividends per share to the nearest cent.

Answer 1

Answer is given below

Year 1 $566,000 Year 2 $451,000 Year 3 $511,000 Dividend Less: Preferred dividend Common stock dividend $35,000 $531,000 $35,000 $416,000 $35,000 $476,000 35,000 35,000 Number of Preferred shares Dividend per preferred share $11 35,000 $1 (Preferred dividend/Total preferred shares) Number of Common shares Dividend per Common share 98,000 | $50 98,000 $4 98,000(Common dividend/Common shares) $5 Note: Preferred stock dividend = Par value X 1% = $100*1% = $1 Total dividend for preferred stock = 35,000 X $1 =$35,000