Question

Required information [The following information applies to the questions displayed below.) York's outstanding stock consists of 80,000 shares of noncumulative 7.0% preferred stock with a $5 par value and also 140,000 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. $ Year 1 total cash dividends Year 2 total cash dividends Year 3 total cash dividends Year 4 total cash dividends 16,500 26,000 275,000 425,000 e the data in Exercise 13-10 to determine the amount of dividends paid each year to each of the two classes of stock assuming that preferred stock is cumulative. (Round your "Dividend per Preferred Share" answer to 3 decimal places.) Par Value per Preferred Share Dividend Rate Dividend per Preferred Share Number of Preferred Shares Preferred Dividend nual Preferred Dividend: Total Cash Dividend Paid Paid to Preferred Paid to Common Dividends in Arrears at year-end $ ar 1 ar 2 ar 3 ar 4 tals 16,500 26,000 275,000 425,000 742,500 $ $ 0 $

Answer 1

Preferred dividend = 80000*5*7% = 28000

Dividend distribution

	Par value per preferred share	Dividend rate	Dividend per preferred share	Number of preferred shares	Preferred dividend
Annual preferred dividend	5	7%	0.35	80000	28000
	Total cash dividend paid	paid to preferred	Paid to Common	Dividends in arrears at year end
Year 1	16500	16500	0	0
Year 2	26000	26000	0	0
Year 3	275000	28000	247000	0
Year 4	425000	28000	397000	0
Totals	742500	98500	644000	0