Question

Exercise 15-23 Oriole Company has outstanding 2,600 shares of $100 par, 7% preferred stock and 16,400 shares of $10 par value common. The following schedule shows the amount of dividends paid out over the last 4 years. Allocate the dividends to each type of stock under assumptions (a) and (b). Express your answers in per-share amounts using the format shown below. (Round the rate of participation to 4 decimal places, eg. 1.4278%. Round answers to 2 decimal places, eg. $6.85.) Assumptions Preferred, noncumulative, and nonparticipating Preferred, cumulative, and fully participating Yer Paie.eut PrefedCommenPreten Preferred Common Preferred Common 2015 $13,500 2016 $26,400 2017 $62,000 2018 $83,200

Answer 1

per share (in $)
		Preferred, noncumulative, nonparticipating (a)		Preferred, cumulative, and participating (b)
Year	Paidout	Preferred	Common	Preferred	Common
2015	13,500	5.1923	-	5.1923	-
2016	26,400	7.0000	0.5000	8.8077	0.2134
2017	62,000	7.0000	2.6707	14.6226	1.4623
2018	83,200	7.0000	3.9634	19.6226	1.9623

Value (in $)
		Preferred, noncumulative, nonparticipating		Preferred, cumulative, and participating
Year	Paidout	Preferred	Common	Preferred	Common
2015	13,500	13,500		13,500
2016	26,400	18,200	8,200	22,900	3,500
2017	62,000	18,200	43,800	38018	23,981
2018	83,200	18,200	65,000	51019	32,181

  

Notes:

1. if dividend is not paid to cumulative shareholders in previous years then first their past dues must be paid and if any thing remains then common stock holders will be paid.

2. When there are participating preferential shares, any dividend in excess of preferrential dividend rate paid to common shareholders must be paid to participating preferrential share holders in the participation ratio decided.