Stockholders' equity of Ernst Company consists of 82,000 shares of $5 par value, 10% cumulative preferred...

 

Transcribed Image Text:

Stockholders' equity of Ernst Company consists of 82,000 shares of $5 par value, 10% cumulative preferred stock and 290,000 shares of $1 par value common stock. Both classes of stock have been outstanding since the company's inception. Ernst did not declare any dividends in the prior year, but it now declares and pays a $135,000 cash dividend at the current year-end. Determine the amount distributed to each class of stockholders for this two-year-old company. Par Value per Preferred Dividend Rate Share Dividend per Preferred Share Calculation of preferred dividend: $ 5.00 10 % $ 0.50 Number of Preferred Shares Preferred Dividend for two years 82,000 $ 82,000 Total cash dividend To preferred shareholders To common shareholders $ 0 Stockholders' equity of Ernst Company consists of 82,000 shares of $5 par value, 10% cumulative preferred stock and 290,000 shares of $1 par value common stock. Both classes of stock have been outstanding since the company's inception. Ernst did not declare any dividends in the prior year, but it now declares and pays a $135,000 cash dividend at the current year-end. Determine the amount distributed to each class of stockholders for this two-year-old company. Par Value per Preferred Dividend Rate Share Dividend per Preferred Share Calculation of preferred dividend: $ 5.00 10 % $ 0.50 Number of Preferred Shares Preferred Dividend for two years 82,000 $ 82,000 Total cash dividend To preferred shareholders To common shareholders $ 0

Answer rating: 100% (QA)

Answer To determine the amount distributed to each class of stockholders for Ernst Company lets brea... View the full answer