Question: Dividends for Preferred and Common Stock The Stockholders Equity category of

Dividends for Preferred and Common Stock The Stockholders’ Equity category of Rausch Company’s balance sheet as of December 31, 2010, appeared as follows:
Preferred stock, $100 par, 8%,
2,000 shares issued and outstanding ..... $ 200,000
Common stock, $10 par,
40,000 shares issued and outstanding ..... 400,000
Additional paid-in capital ............ 500,000
Total contributed capital ..........$1,100,000
Retained earnings ...............900,000
Total stockholders’ equity ..........$2,000,000
The notes to the financial statements indicate that dividends were not declared or paid for 2008 or 2009. Rausch wants to declare a dividend of $118,000 for 2010.

Required
Determine the total and the per-share amounts that should be declared to the preferred and common stockholders under the following assumptions:
1. The preferred stock is noncumulative, nonparticipating.
2. The preferred stock is cumulative, nonparticipating.



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  • CreatedJanuary 12, 2012
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