Dividends Per Share Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 70,000 shares of cumulative preferred 3% stock, $20 par, and 410,000 shares of $25 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $34,000; second year, $76,000; third year, $90,000; fourth year, $110,000. Calculate the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, enter "0.00". 1st Year 2nd Year 3rd Year 4th Year Preferred stock (dividends per share) $ 34,000 $ 76,000 $ $ Common stock (dividends per share) $ 0.00 $ 0.00 $ $
| Nos | Amount | |||||
| Preferred shares, cumulative 3% | 70,000 | $ 1,400,000 | ||||
| Common Shares | 410,000 | $ 10,250,000 | ||||
| Dividend distributed | Year | |||||
| $ 34,000 | 1 | |||||
| $ 76,000 | 2 | |||||
| $ 90,000 | 3 | |||||
| $ 110,000 | 4 | |||||
| From the above given data, Preferred dividend per year | ||||||
| ($1,400,000 x 3%) | $ 42,000 | |||||
| So minimum of $42,000 must be given to preference shareholders each year | ||||||
| and if there is any shortfall or no dividend given, then remaining amount is accumulated | ||||||
| using this concept | ||||||
| Year | Preferred | Common | Total | Balance preferred outstanding | ||
| 1 | $ 34,000 | $ - | $ 34,000 | $ 8,000 | ||
| 2 | $ 50,000 | $ 26,000 | $ 76,000 | $ - | ||
| (42,000 + 8,000) | ||||||
| 3 | $ 42,000 | $ 48,000 | $ 90,000 | $ - | ||
| 4 | $ 42,000 | $ 68,000 | $ 110,000 | $ - | ||
| So only first year there is shortfall of $8000, and in remaining years, sufficient amount is avaialble for preference shareholders | ||||||
Dividends Per Share Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 70,000...