Question

At December 31, 2016, the records of Hoffman Company reflected the following balances in the shareholders' equity accounts: Common shares: par $14 per share: 48,000 shares outstanding Preferred shares: 8 percent; par $10 per share; 7,200 shares outstanding Retained earnings: $224,000 On January 1, 2017, the board of directors was considering the distribution of a $66,000 cash dividend. No dividends were paid during 2015 and 2016 Required: Determine the total and per-share amounts that would be paid to the common shareholders and to the preferred shareholders under two independent assumptions! 1-a. The preferred shares are non-cumulative. (Round your per share amount to 2 decimal places.) Total Per Share Paid to preferred sharcholders Paid to common shareholders 1-b. The preferred shares are cumulative. (Round your per share amount to 2 decimal places.) Total Per Share Paid lo preferred shareholders Paid to common shareholders

Answer 1

ans 1	Total	per share
Paid to preferred shareholder	$5760	$0.80
	(7200*10*8%)	5760/7200
Paid to common stockholder	60240	1.26
	(66000-5760)	60240/48000
ans 2
	Total	per share
Paid to preferred shareholder	17280	2.40
	(7200*10*8%)*3 years	5760/7200
Paid to common stockholder	48720	1.02
	(66000-17280)	60240/48000
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