Question

Use the following information for the Exercises below

[The following information applies to the questions displayed below.]
York’s outstanding stock consists of 85,000 shares of 7.0% preferred stock with a $5 par value and also 260,000 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	$	19,100
2016 total cash dividends		27,700
2017 total cash dividends		230,000
2018 total cash dividends		380,000

Use the following information for the Exercises below.

[The following information applies to the questions displayed below.]

York’s outstanding stock consists of 85,000 shares of 7.0% preferred stock with a $5 par value and also 260,000 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	$	19,100
2016 total cash dividends		27,700
2017 total cash dividends		230,000
2018 total cash dividends		380,000

Answer 1

Answer

• Requirement 1: Preferred stock are NON CUMULATIVE

	Par Value per Preferred Share	Dividend rate	Dividend per Preferred Share	No. of Preferred Shares	Preferred Dividend
Annual Preferred Dividend:	$                             5	7.00%	$                   0.350	85,000	$            29,750.00
	Total Cash Dividend paid	Paid to Preferred	Paid to Common	Dividends in Arrears at Year end
2015	$            19,100.00	$           19,100.00	$                          -	$          10,650.00 or $ 0
2016	$            27,700.00	$           27,700.00	$                          -	$          12,700.00 or $ 0
2017	$          230,000.00	$           29,750.00	$        200,250.00	$                          -
2018	$          380,000.00	$           29,750.00	$        350,250.00	$                          -
TOTAL	$          656,800.00	$        106,300.00	$        550,500.00	$                          -

• Requriement 2: Preferred Stock are CUMULATIVE

	Par Value per Preferred Share	Dividend rate	Dividend per Preferred Share	No. of Preferred Shares	Preferred Dividend
Annual Preferred Dividend:	$                             5	7.00%	$                   0.350	85,000	$            29,750.00
	Total Cash Dividend paid	Paid to Preferred	Paid to Common	Dividends in Arrears at Year end
2015	$            19,100.00	$           19,100.00	$                          -	$          10,650.00
2016	$            27,700.00	$           27,700.00	$                          -	$          12,700.00
2017	$          230,000.00	$           42,450.00	$        187,550.00	$                          -
2018	$          380,000.00	$           29,750.00	$        350,250.00	$                          -
TOTAL	$          656,800.00	$        119,000.00	$        537,800.00	$                          -