Question #2 (3 points ) The stockholders’ equity section of the XYZ Corporation’
ID: 2468580 • Letter: Q
Question
Question #2 (3 points) The stockholders’ equity section of the XYZ Corporation’s balance sheet shows these balances in the capital stock accounts:
Preferred Stock 5% $100 par cumulative $100,000.
Common Stock $1 Par $ 1,000,000.
The board of directors made the following dividend declarations and payments:
2013 $ 0
2014 $120,000
2015 $200,000
Required: Prepare a schedule showing the distribution of the dividends between preferred and common stockholders for all three years. Also indicate the dividend per share as well.
Explanation / Answer
Dividend to preferred shareholders = 100,000@5% = $5,000
Total dividend
Arrear
Dividend to preferred
Dividend to common stock
2013
0
5,000
0
0
2014
120,000
5,000 +5000
= 10,000 total
Dividend $10 per share
110,000
Dividend
Per share .11
2015
200,000
5000
Dividend per share $5
195,000
Dividend per share $.975
Total dividend
Arrear
Dividend to preferred
Dividend to common stock
2013
0
5,000
0
0
2014
120,000
5,000 +5000
= 10,000 total
Dividend $10 per share
110,000
Dividend
Per share .11
2015
200,000
5000
Dividend per share $5
195,000
Dividend per share $.975