Question

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 4,000 Year 2 Year 3 100,800 Determine the dividends per share for preferred and common stock for each year. If an answer is zero, enter 'o'. Round all answers to two decimal places. Year 1 Year 2 Year 3 Preferred stock (Dividends per share) $ $ Common stock (Dividends per share) $

Answer 1

	1st Year	2nd Year	3rd Year
Preferred Dividend	16,000*1%*$40 = $6,400	16,000*1%*$40 = $6,400	16,000*1%*$40 = $6,400
Preferred Dividend paid	$                                       6,400	$                                      4,000	$2,400+$6,400 = $8,800
Preferred dividend carreid forward	$                                                -	$6,400-$4,000 = $2,400	$                                                   -
Dividend available for common stock	$21,600-$6,400 = $15,200	$                                               -	$100,800-$8,800 = $92,000
Preferred Stock (dividend per share)	$40*1% = $0.40	$40*1% = $0.40	$40*1% = $0.40
Common Stock (dividend per share)	$15,200/80,000 = $0.19		$92,000/80,000 = $1.15

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