Dividends Keener Company has had 700 shares of 7%, $100 par preferred stock and
ID: 2575861 • Letter: D
Question
Dividends Keener Company has had 700 shares of 7%, $100 par preferred stock and 46,000 shares of $5 stated value common stock outstanding for the last 3 years. During that period, dividends paid totaled $3,700, $29,400, and $29,400 for each year, respectively. Required: Compute the amount of dividends that Keener must have paid to preferred shareholders and common shareholders in each of the 3 years, given the following 3 independent assumptions:
3. Preferred stock is fully participating and cumulative.
Keener Company
Schedule of Dividends
Preferred
Common
Total
Year 1
$
$
$
Year 2
$
$
$
Year 3
$
$
$
Keener Company
Schedule of Dividends
Preferred
Common
Total
Year 1
$
$
$
Year 2
$
$
$
Year 3
$
$
$
Explanation / Answer
Keener Company Schedule of Dividends Particulars Preferred Common Total Balance payable for Preference Share capital Year 1 $ 3,700.00 - 3,700 1,200.00 Year 2 $ 6,100.00 23,300 29,400 - Year 3 $ 4,900.00 24,500 29,400 - Preferred shares = 700 Shares X $ 100 = $ 70,000.00 Dividend Value = 7% = $ 4,900.00 Dividend to preference sharehodlers are paid annually $ 4900, if fully not paid then balance will be payable in next dividend available.