Question

Requirement 1. Assuming the preferred stock is​ cumulative, compute the amount of dividends to preferred stockholders and to common stockholders for 2024 and 2025 if total dividends are $ 18600 in 2024 and $ 47000 in 2025. Assume no changes in preferred stock and common stock in 2025. ​(Assume all preferred dividends have been paid prior to 2024. Complete all input boxes. Enter a​ "0" for zero amounts. For the current year preferred​ dividend, be sure to enter the calculated dividend on the​ "current year​ dividend" line and the paid out dividend on the​ "total dividend to preferred​ stockholders" line.)

Answer 1

To calculate the dividends to preferred stockholders and common stockholders for the years 2024 and 2025, we need to know the following details regarding the preferred stock:

1. The dividend rate of the preferred stock.
2. The total number of preferred shares issued.
3. The total number of common shares issued.

Since you have not provided these details, I will assume some hypothetical values. You can adjust the calculations based on the actual figures you have.

Let's assume:

• Preferred stock dividend rate = 6%
• Total preferred shares = 1,000 shares
• Total common shares = 2,000 shares

Step 1: Calculate the annual preferred dividend

Annual Preferred Dividend = Number of Preferred Shares × Dividend Rate × Par Value

Assuming a par value of $100 for preferred stock:

• Annual Preferred Dividend = 1,000 shares × 6% × $100 = $6,000.

Step 2: Calculate the dividends for 2024

Total Dividends for 2024 = $18,600

1. Preferred Stock Dividends:

   • The annual preferred dividend is $6,000.
   • Since the preferred stock is cumulative, all preferred dividends must be paid before paying common dividends.
   • Therefore, in 2024:
     • Current Year Preferred Dividend = $6,000
     • Total Dividend to Preferred Stockholders = $6,000 (this is also the total since there are no unpaid previous years’ dividends).

2. Common Stock Dividends:

   • Total Dividends Available for Common Stock = Total Dividends - Total Preferred Dividends
   • Common Dividends = $18,600 - $6,000 = $12,600.

Step 3: Calculate the dividends for 2025

Total Dividends for 2025 = $47,000

1. Preferred Stock Dividends:

   • The preferred dividend of $6,000 will still be carried over.
   • Therefore, in 2025:
     • Current Year Preferred Dividend = $6,000
     • Total Dividend to Preferred Stockholders = $6,000 (current year, assuming no arrears).

2. Common Stock Dividends:

   • Total Dividends Available for Common Stock = Total Dividends - Total Preferred Dividends
   • Common Dividends = $47,000 - $6,000 = $41,000.

Summary of Results

For 2024:

• Current Year Preferred Dividend = $6,000
• Total Dividend to Preferred Stockholders = $6,000
• Common Stock Dividends = $12,600

For 2025:

• Current Year Preferred Dividend = $6,000
• Total Dividend to Preferred Stockholders = $6,000
• Common Stock Dividends = $41,000

You should replace the figures if the assumptions I made do not reflect your actual situation (especially the preferred stock details). If you have more specific figures, please provide them, and I'd be happy to adjust the calculations!

Answer 2

Stockholders' Equity
Paid-In Capital:
Preferred Stock—8%, $10 Par Value; 150,000 shares authorized, 27,000 shares issued and outstanding $270,000
Common Stock—$1 Par Value; 575,000 shares authorized, 290,000 shares issued and outstanding 290,000
Paid-In Capital in Excess of Par—Common 725,000
Total Paid-In Capital 1,285,000
Retained Earnings 150,000
Total Stockholders' Equity $1,435,000

Answer 3

Thank you for providing the details of the stockholders' equity. Based on the data provided, we can calculate the preferred stock dividends for the years 2024 and 2025, and determine the remaining amount allocated to common shareholders.

Step 1: Calculate the Annual Preferred Dividend

You have the following preferred stock details:

• Preferred Stock Dividend Rate: 8%
• Par Value: $10
• Shares Issued and Outstanding: 27,000 shares

Annual Preferred Dividend Calculation:

\[ \text{Annual Preferred Dividend} = \text{Number of Shares} \times \text{Par Value} \times \text{Dividend Rate} \]

Substituting the values:

\[ \text{Annual Preferred Dividend} = 27,000 \text{ shares} \times 10 \text{ (par value)} \times 0.08 = 21,600 \]

Step 2: Calculate the Dividends for 2024

Total Dividends for 2024: $18,600

1. Preferred Stock Dividends:

   • Current Year Preferred Dividend: $21,600 (This is the amount required for one year, but since total dividends are less, we will pay what we can.)
   • Since we cannot cover the full preferred dividend with the total available dividends, we will pay out the available amount in total dividends.

   Total Dividend to Preferred Stockholders in 2024: $18,600.

   Current Year Preferred Dividend: $18,600 (This will not fully cover one year’s dividend due to insufficient funds.)

2. Common Stock Dividends:

   • Total Dividends Available for Common Stock = Total Dividends - Total Preferred Dividends Paid
   • Common Dividends = $18,600 - $18,600 = $0.

Step 3: Calculate the Dividends for 2025

Total Dividends for 2025: $47,000

1. Preferred Stock Dividends:

   • Current Year Preferred Dividend: $21,600
   • Total Dividend to Preferred Stockholders in 2025: $21,600 (will be fully paid this year since we have sufficient funds).

2. Common Stock Dividends:

   • Total Dividends Available for Common Stock = Total Dividends - Total Preferred Dividends
   • Common Dividends = $47,000 - $21,600 = $25,400.

Summary of Results

For 2024:

• Current Year Preferred Dividend = $18,600
• Total Dividend to Preferred Stockholders = $18,600
• Common Stock Dividends = $0

For 2025:

• Current Year Preferred Dividend = $21,600
• Total Dividend to Preferred Stockholders = $21,600
• Common Stock Dividends = $25,400

This outlines how preferred and common stock dividends are distributed based on the given scenarios. If you have any further questions or need additional calculations, please let me know!