Accounting Question RE Stocks help*?

Question

A company had stock outstanding as follows during each of its first three years of operations: 2,000 shares of $10, $100 par, cumulative, nonparticipating preferred stock and 50,000 shares of $10 par common stock. The amounts distributed as dividends are presented below. Determine the total and per share dividends for each class of stock for each year by completing the schedule.
preferred common
year dividends Total Per Share Total Per Share
1 $10,000 _______ ______ _______ ________
2 25000 _______ ______ ______ _______
3 60,000 _______ ______ ______ _______

there is not a % given for preferred stock... is the question unanswerable? N/A is not a choice on the test!

i learn to stop banging my head against the wall if the question is unanswerable. thanks for your helpful response.

Answer 1

I can't imagine they'd give you a question that was not answerable. Check it again. Are you sure it's not 2,000 shares of 10% $100 par cumulative, preferred stock? I'm going to answer the question on that basis, just so you can see how it's done. 10% of $100 means the preferred stockholders must get $10 per share or $20,000 in total each year. The shares are cumulative which means that if the preferred dividend falls short in any year, the balance is in arrears and the co. must make good this arrears the next yr before the common stockholders get their dividend. So here we go:

Year 1
Only $10,000 was paid. This means all $10,000 were paid to preferred stockholders at $5 per share and there is an arrears of another $5 per share to be made good next yr. The common stockholders get nothing this year.

Year 2
Only $25,000 was paid. This means the $5 in arrears from Y1 due to the preferred stockholders totalling $10,000. The Y2 preferred dividend is another $20,000 but there's only $15,000 left, so all $15,000 ($7.50 per share) go to the preferred stockholder and there is another $2.50 per share in arrears to be made good next year. Total preferred dividend is $12.50 per share. Common stockholders get nothing again.

Year 3
Preferred dividend is $2.50 from Y2 and current yr's $10, totalling $12.50 per share or $25,000 in total. Since $60,000 was paid out, the remainder (60,000 - 25,000) $35,000 go to the common stockholders at 35,000/50,000 or $0.70 per share.

Just to double-check, taking all 3 yrs together, the preferred stockholders got $10,000 + $25,000 + $25,000 = $60,000 which is $20,000 for 3 years, so there's nothing in arrears owing to them.

Answer 2

Hello, it sounds like you just need to figure out who the current transfer agent it. Typically the bank broker who you opened the account would or could do this for you but if that is not the case then you can 1) call the old transfer agent and ask them who the current one is, 2) go online and look up the company stocks website and find their investor relations dept and call them or 3) try to do the research yourself via google. good luck

Answer 3

Plese explain to us what you learn about research and your own studies by us answering your homework questions?