On December 31, 2020, the shareholders' equity of Finland Corporation shows the following:

           Preferred shares—$ 6, no par, 8,000 shares outstanding.......................... $ 400,000

           Common shares—no par, 60,000 shares outstanding................................. 800,000

           Retained earnings....................................................................................  240,000

           Total shareholders' equity................................................................... $ 1,440,000

Assume that preferred dividends were last paid on December 31, 2018, and that all of the company's retained earnings are to be paid out in dividends on December 31, 2020.

 

Instructions

If the preferred shares are cumulative and fully participating, how much should each class of shares receive?

Answer rating: 100% (QA)

Preference share dividend arrears Dividend for 2019 8000 preference shares 6 per share 48000 Dividen... View the full answer