Massive Corp. is authorized to issue unlimited $0.90 no-par preferred shares and unlimited no-par common shares. There
Question:
Massive Corp. is authorized to issue unlimited $0.90 no-par preferred shares and unlimited no-par common shares. There are 12,000 preferred and 36,000 common shares outstanding. In a five-year period, annual dividends paid were $2,000, $5,000, $72,000, $6,000, and $144,000, respectively.
Required:
Calculate the amount of dividends that would be paid to each share class for each year under the following separate cases. Where applicable, the matching dividend per common share is $1.00.
Case A Preferred shares are cumulative and non-participating.
Case B Preferred shares are non-cumulative and non-participating.
Case C Preferred shares are non-cumulative and fully participating. Participation is based on the relative number of shares outstanding.
Case D Preferred shares are non-cumulative and partially participating up to an additional $0.90 per share. Participation is based on relative annual total base dividends.
Introduction to Accounting An Integrated Approach
ISBN: 978-0078136603
6th edition
Authors: Penne Ainsworth, Dan Deines