Exercise 15-23 Shamrock Company has
outstanding 2,400 shares of $100 par, 7% preferred stock and 13,600
shares of $10 par value common. The following schedule shows the
amount of dividends paid out over the last 4 years.
Homework Answers
|
Assumptions |
|||||
|
(a) preferred, noncumulative and nonparticpating |
(b) preferred, cumulative and fully particpating |
||||
|
Year |
Paid-out |
Preferred |
Common |
Preferred |
Common |
|
2018 |
$13000 |
$5.42 |
0 |
$5.42 |
0 |
|
2019 |
$27300 |
$7.00 |
$0.77 |
$8.58 |
$0.49 |
|
2020 |
$60500 |
$7.00 |
$2.60 |
$9.14 |
$2.84 |
|
2021 |
$69700 |
$7.00 |
$3.89 |
$9.71 |
$3.41 |
Part A
2018
|
Dividends paid |
13000 |
|
Amount due preferred (2,400 X $100 X 7%) |
16800 |
|
Preferred per share ($13,000 ÷ 2,400) |
$5.42 |
|
Common per share |
0 |
2019
|
Dividends paid |
27300 |
|
Amount due preferred (2,400 X $100 X 7%) |
16800 |
|
Amount due common (27300-16800) |
10500 |
|
Preferred per share ($16,800 ÷ 2,400) |
$7.00 |
|
Common per share (10500 ÷ 13600) |
$0.77 |
2020
|
Dividends paid |
60500 |
|
Amount due preferred (2,400 X $100 X 7%) |
16800 |
|
Amount due common (60500-16800) |
43700 |
|
Preferred per share ($16,800 ÷ 2,400) |
$7.00 |
|
Common per share (43700 ÷ 13600) |
$2.60 |
2021
|
Dividends paid |
69700 |
|
Amount due preferred (2,400 X $100 X 7%) |
16800 |
|
Amount due common (69700-16800) |
52900 |
|
Preferred per share ($16,800 ÷ 2,400) |
$7.00 |
|
Common per share (43700 ÷ 13600) |
$3.89 |
Part B
2018
|
Dividends paid |
13000 |
|
Amount due preferred (2,400 X $100 X 7%) |
16800 |
|
Preferred per share ($13,000 ÷ 2,400) |
$5.42 |
|
Common per share |
0 |
2019
|
Dividends paid |
27300 |
|
Amount due preferred (2,400 X $100 X 7%) |
16800 |
|
In arrears ($16800 – $13,000) |
3800 |
|
Total due preferred |
20600 |
|
Amount due common (27300-20600) |
6700 |
|
Preferred per share ($20600 ÷ 2,400) |
$8.58 |
|
Common per share (6700 ÷ 13600) |
$0.49 |
2020
|
Dividends paid |
60500 |
|
Amount due preferred (2,400 X $100 X 7%) |
16800 |
|
Amount due common (13600*10*7%) |
9520 |
|
Amount available for participation (60500-16800-9520) |
34180 |
|
Par value of stock that is to participate (24000+136000) |
160000 |
|
Participating dividend – Preferred (34180*24000/160000) |
5127 |
|
Participating dividend – common (34180*136000/160000) |
29053 |
|
Preferred per share ((16800+5127)/2400) |
$9.14 |
|
Common per share ((9520+29053)/13600) |
$2.84 |
2021
|
Dividends paid |
69700 |
|
Amount due preferred (2,400 X $100 X 7%) |
16800 |
|
Amount due common (13600*10*7%) |
9520 |
|
Amount available for participation (69700-16800-9520) |
43380 |
|
Par value of stock that is to participate (24000+136000) |
160000 |
|
Participating dividend – Preferred (43380*24000/160000) |
6507 |
|
Participating dividend – common (43380*136000/160000) |
36873 |
|
Preferred per share ((16800+6507)/2400) |
$9.71 |
|
Common per share ((9520+36873)/13600) |
$3.41 |
|
Dividends paid |
69700 |
|
Amount due preferred (2,400 X $100 X 7%) |
16800 |
|
Amount due common (69700-16800) |
52900 |
|
Preferred per share ($16,800 ÷ 2,400) |
$7.00 |
|
Common per share (43700 ÷ 13600) |
$3.89 |
Add Answer to:
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