Zero Calories Company has 16,000 shares of cumulative preferred 1% stock, $40 par and 80,000 shares of $150 par common stock

Zero Calories Company has 16,000 shares of cumulative preferred 1% stock, $40 par and 80,000 shares of $150 par common stock. The following amounts were distributed as dividends:

Year 1 $ 21,600
Year 2 4,000
Year 3 100,800

Determine the dividends per share for preferred and common stock for each year.


Answer:











Year 1 Year 2 Year 3
Amount distributed……………………………… $21,600 $4,000 $100,800
Preferred dividend (16,000 shares)…………… 6,400 4,000 8,800*
Common dividend (80,000 shares)…………… $15,200 $ 0 $ 92,000
* $2,400 + $6,400
Dividends per share:
Preferred stock………………………………… $0.40 $0.25 $0.55
Common stock………………………………… $0.19 None $1.15




Swan Creek Company has 40,000 shares of cumulative preferred 2% stock, $60 par and 50,000 shares of $50 par common stock. The following amounts were distributed as dividends:

Year 1 $ 30,000
Year 2 90,000
Year 3 125,000

Determine the dividends per share for preferred and common stock for each year


Answer:











Year 1 Year 2 Year 3
Amount distributed………………………………… $30,000 $90,000 $125,000
Preferred dividend (40,000 shares)…………… 30,000 66,000* 48,000
Common dividend (50,000 shares)……………… $ 0 $24,000 $ 77,000
* $18,000 + $48,000
Dividends per share:
Preferred stock………………………………… $0.75 $1.65 $1.20
Common stock………………………………… None $0.48 $1.54