The corporate charter of Parker Corporation authorizes the issuance of 25,000 shares of 5% cumulative, preferred stock, $60 par, and 200,000 shares of $40 par common stock. At the end of the current year, the titles and balances of stockholders' equity accounts are as follows: Parker declared dividends of $400,000 for the current year.
Required:
a) What is the amount of the annual dividend per share for preferred stock?
b) If there are two years of preferred dividends in arrears at the beginning of the current year, what total amount of dividends will be paid to the preferred shareholder?
c) What total amount will be paid to the common shareholder if there are two years of preferred dividends in arrears at the beginning of the year?
d) Prepare the entry to record the declaration of the dividend.

Question

The corporate charter of Parker Corporation authorizes the issuance of 25,000 shares of 5% cumulative, preferred stock, $60 par, and 200,000 shares of $40 par common stock. At the end of the current year, the titles and balances of stockholders' equity accounts are as follows:  Parker declared dividends of $400,000 for the current year.
Required:
a) What is the amount of the annual dividend per share for preferred stock?
b) If there are two years of preferred dividends in arrears at the beginning of the current year, what total amount of dividends will be paid to the preferred shareholder?
c) What total amount will be paid to the common shareholder if there are two years of preferred dividends in arrears at the beginning of the year?
d) Prepare the entry to record the declaration of the dividend.

Quizplus · Accepted Answer

The Answer of The corporate charter of Parker Corporation authorizes the issuance of 25,000 shares of 5% cumulative, preferred stock, $60 par, and 200,000 shares of $40 par common stock. At the end of the current year, the titles and balances of stockholders' equity accounts are as follows:  Parker declared dividends of $400,000 for the current year.
Required:
a) What is the amount of the annual dividend per share for preferred stock?
b) If there are two years of preferred dividends in arrears at the beginning of the current year, what total amount of dividends will be paid to the preferred shareholder?
c) What total amount will be paid to the common shareholder if there are two years of preferred dividends in arrears at the beginning of the year?
d) Prepare the entry to record the declaration of the dividend.

The Corporate Charter of Parker Corporation Authorizes the Issuance of 25,000