Please let me know how you arrived at these answers. Thank you! Martinez Company
ID: 2378377 • Letter: P
Question
Please let me know how you arrived at these answers. Thank you!
Martinez Company's ledger shows the following balances on December 31, 2012. 5% Preferred stock-$10 par value, outstanding 20,300 shares $203,000 Common stock-$100 par value, outstanding 30,450 shares 3,045,000 Retained earnings 639,450 Assuming that the directors decide to declare total dividends in the amount of $269,990, determine how much each class of stock should receive under each of the conditions stated below. One year's dividends are in arrears on the preferred stock. The preferred stock is cumulative and fully participating. Preferred Common The preferred stock is noncumulative and nonparticipating. Preferred Common The preferred stock is noncumulative and is participating in distributions in excess of a 7% dividend rate on the common stock. (Note: Do not round rate of participation. Round final answers to zero decimal places, e.g. 12,310.) Preferred CommonExplanation / Answer
a.Dividend arrear=203000*5%=10150
Current year dividend=203000*5%=10150
Total prefere stock dividend=10150+10150=20300
Common dividend=269990-20300=249690
b. Prefered stock=10150
common stock=269990-10150=259840
c.common stock=3045000*7%=213150
Prefferd stock=10150+(259840-213150)=56840