DIVIDEND ALLOCATIONS Situation 1 Akimoto Company has the following stock outstanding: Common Stock Preferred Stock 50,000 shares..5,000
Question:
DIVIDEND ALLOCATIONS
Situation 1 Akimoto Company has the following stock outstanding:
Common Stock Preferred Stock
50,000 shares………………………..5,000 shares
$1 par value…………………………$40 par, $2 dividend
The amount available for dividends this year is $40,000. Prepare the dividend allocation between the preferred and common shares.
Situation 2 Benitez Company has the following stock outstanding:
Common Stock Preferred Stock
70,000 shares………………….Cumulative: 1,500 shares
$1 par value…………………...$50 par, $2 dividend
………………………………...Noncumulative: 4,000 shares
…………………………………$50 par, $2 dividend
No dividends were declared in year 1 of operation. In year 2, there is $28,000 available for dividends. Prepare the dividend allocation between the preferred and common shares.
DividendA 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...
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