Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

Q27E_1

Expert-verified
Horngren'S Financial And Managerial Accounting
Found in: Page 714

Short Answer

Computing dividends on preferred and common stock and journalizing

Northern Communications has the following stockholders’ equity on December 31,

2018:

Preferred Stock—5%, $11 Par Value; 150,000 shares authorized, 20,000 shares issued and outstanding

Paid-In Capital:

$ 220,000

760,000

Stockholders’ Equity

Paid-In Capital in Excess of Par—Common 680,0006

Total Paid-In Capital 1,660,000

Retained Earnings 200,000

Total Stockholders’ Equity $ 1,860,000

Common Stock—$2 Par Value; 575,000 shares

authorized, 380,000 shares issued and outstanding

Requirements

1. Assuming the preferred stock is cumulative, compute the amount of dividends to preferred stockholders and to common stockholders for 2018 and 2019 if total dividends are $9,000 in 2018 and $45,000 in 2019. Assume no changes in preferred stock and common stock in 2019.

In 2018, Preferred stock dividend paid is $9,000

In 2019, Preferred stock dividend paid is $13,000 and Common stock dividend paid is $32,000

See the step by step solution

Step by Step Solution

Step 1: Basic Introduction

Step 2:Amount of dividend to preferred stockholders and to common stockholders for 2018 and 2019

2018

Preferred stock dividend paid

$9,000

Common stock dividend paid

$0

2019

Preferred stock dividend paid ($2,000 + $11,000)

$13,000

Common stock dividend paid ($45,000 - $13,00)

$32,000

Most popular questions for Business-studies Textbooks

Icon

Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.