In each of the following independent cases, it is assumed that the corporation has outstanding 20,000, $0.80,

Question:

In each of the following independent cases, it is assumed that the has outstanding 20,000, $0.80, preferred shares, with a carrying value of $200,000, and 80,000 common shares, with a carrying value of $800,000. Although dividends have been paid regularly up to 2011, no dividends were declared in 2012 or 2013.
1. At December 31, 2014, the board of directors wants to distribute $125,000 in dividends. How much will the preferred shareholders receive if their shares are cumulative and non-participating?
2. At December 31, 2014, the board of directors wants to distribute $200,000 in dividends. How much will the preferred shareholders receive if their shares are cumulative and participating up to 15% in total?
3. On December 31, 2014, the preferred shareholders received an $80,000 on their shares, which are cumulative and fully participating. How much money was distributed in total for dividends?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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...