Question: The Company has the same capital structure (except for retained earnings) for the past five year, see details below: 6% Preference Share Capital, 80,000 shares

The Company has the same capital structure (except for retained earnings) for the past five year, see details below:
6% Preference Share Capital, 80,000 shares issued and outstanding, P 50 par 4,000,000
Ordinary Share Capital, 200,000 shares issued and outstanding, P 30 par 6,000,000
Retained Earnings 5,000,000

No dividends were paid prior to 2020 for two years. On December 10, 2020, the Company declared P 1,000,000 as cash dividends to shareholders of record of December 21, 2020, payable on January 5, 2021.

Assuming Preference share capital is NON-CUMULATIVE and PARTICIPATING UP TO ADDITIONAL 5%, how much is the dividend allocated to PS?

Assuming Preference share capital is NON-CUMULATIVE and PARTICIPATING UP TO ADDITIONAL 5%, how much is the dividend allocated to OS?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!