McBain Industries, started in 2008, has both common and preferred stock Information about each class of stock is given next The $50 par value preferred stock is cumulative and pays an annual dividend of $2 50 per share During 2008 and 2009, 10,000 shares were outstanding The common stock has a par ...

a In the 2008 to the financial statements Mc Bain Industries should disclose the dividends ...

McBain Industries, started in 2008, has both common and preferred stock. Information about each class of stock

Question:

McBain Industries, started in 2008, has both common and preferred stock. Information about each class of stock is given next.
• The $50 preferred stock is cumulative and pays an annual of $2.50 per share. During 2008 and 2009, 10,000 shares were outstanding.
• The has a of $0.01. During 2008 and 2009, 450,000 shares were outstanding.
• In 2008, no dividends were paid by McBain. On August 8, 2009, McBain declared a $0.50 per share cash for common shareholders of record September 8, payable on September 15.
Required:
(a) What type of disclosure should McBain have had in its 2008 annual report regarding dividends?
(b) Given the information on the what total amount of cash dividends must have been declared by McBain in 2009? Explain.
(c) How would your answer to part (b) have differed if the preferred stock had been noncumulative?
(d) Record the journal entries related to the 2009 dividends.
(e) What type of disclosure should McBain have in its 2009 annual report regarding dividends?
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...