... 1000 shares of $8 preferred and 50000 shares common. During its first two years of operation, the corporation declared (on Drcember 15 to be paid in 60 days) $6000 and $50000 respectively. Determine the total dividends paid in each year to each class of shareholders
Google - ACCOUNTING HOMEWORK HELP: the outstanding share capital or Kuklo corporation includes?
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- 3+ months ago by Clarissan
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- first, year, capital, homework, google, years, accounting, corporation, operation
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Responses (1)
the preferred shares will be paid first and only the remainder will go to the ordinary shares holders.
Therefore:
In december total dividend of 6000 USD is less than 1000 x 8 and therefore the whole amount goes to preffered dividend. The company will keep a payable for the rest of 2000.
Next year, the company will pay the debt of 2000 + 8000 USD to the preferred shares holders and the rest of 40.000 will be distributed to common shares.
In terms of timing, the company pays:
Y1 = NIL (the dividend is just declared in Y1)
Y2 = 6.000
Y3 = 50.000