Dividends on Preferred and Common Stock Pecan Theatre Inc. owns and operates mov
ID: 2516902 • Letter: D
Question
Dividends on Preferred and Common Stock Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: Year 1, $32,000; Year 2, 64,000; Year 3. $152,000; Year 4·$176,000, Year 5 $224,000; and Year 6 $288,000. D ing the entire period ended December 31 of each year, the outstand g stock of the company was composed of 20,000 shares of cumulative preferred 4% stock, $100 par, and 100,000 shares of common stock, $25 par.Explanation / Answer
DIDIDEND YEAR TOTAL PREFERRED DIVIDENT TO BE PAID (FOR THE YEAR + ACCUMULATED) ACTUALLY PAID ACCUMULATED BALANCE FOR COMMON STOCK TOTAL PAID TO PREFERRED PER SHARE TOTAL PAID TO COMMON STOCK PER SHARE YEAR 1 32000 80000 32000 48000 0 32000 1.6 0 0 YEAR 2 64000 128000 64000 64000 0 64000 3.2 0 0 YEAR 3 152000 144000 144000 0 8000 144000 7.2 8000 0.08 YEAR 4 176000 80000 80000 0 96000 80000 4 96000 0.96 YEAR 5 224000 80000 80000 0 144000 80000 4 144000 1.44 YEAR 6 288000 80000 80000 0 208000 80000 4 208000 2.08 NOTE: AMOUNT TO BE PAID TO THE PREFERRED STOCK EACH YEAR 20000*100*0.04 80000