Wade’s outstanding stock consists of 48,000 shares of noncumulative 7.50% preferred stock with a $10 par value and also 120,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends. 2011 $ 13,000 2012 21,000 2013 90,000 2014 197,000 Determine the amount of dividends paid each year to each of the two classes of stockholders: preferred and common. Also compute the total dividends paid to each class for the four years combined.

Wade’s outstanding stock consists of 48,000 shares of noncumulative 7.50% preferred stock with a $10 par value and also 120,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends.

    

2011	$	13,000
2012		21,000
2013		90,000
2014		197,000

     

Determine the amount of dividends paid each year to each of the two classes of stockholders: preferred and common. Also compute the total dividends paid to each class for the four years combined.

 

Explanation:

	Preferred		Common
2011 ($13,000 paid)
Preferred*	$	13,000
Common—remainder			$	0
Total for the year	$	13,000	$	0
2012 ($21,000 paid)
Preferred*	$	21,000
Common—remainder			$	0
Total for the year	$	21,000	$	0
2013 ($90,000 paid)
Preferred*	$	36,000
Common—remainder			$	54,000
Total for the year	$	36,000		54,000
2014 ($197,000 paid)
Preferred*	$	36,000
Common—remainder			$	161,000
Total for the year	$	36,000	$	161,000
2011-2014 ($321,000 paid)
Total for four years	$	106,000	$	215,000

      

* The holders of the noncumulative preferred stock are entitled to no more than $36,000 of dividends in any    one year (7.50% × $10 × 48,000 shares).