DividendsDividends have been declared at year-end. For each independent case below, determine the total amount of dividends that each class...

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Dividends

Dividends have been declared at year-end. For each independent case below, determine the total amount of dividends that each class of stock will receive. For all cases assume there are 8,000 shares outstanding of $10 par value common stock and 2,000 shares outstanding of 10%, $100 par value preferred stock. Show your calculations.

Case	Total Dividends Declared	Preferred Stock Cumulative	Preferred Dividends in Arrears	Total Amount to Preferred	Total Amount to Common
A	$40,000	No	No	$	$
B	100,000	No	No	$	$
C	75,000	Yes	1 year	$	$
D	85,000	Yes	3 years	$	$
E	15,000	Yes	No	$	$

Stock Splits, Dividends and Restrictions on Retained Earnings

Match each item/event pair below with the indicated change in the item. An individual classification may be used more than once, or not at all. For each dividend, assume that both declaration and payment or distribution has occurred.

Classifications

A. Item increases

B. Item decreases

C. Item is unchanged

D. Direction of change cannot be determined

Classification	Item	Event
1.	Book value per share	Stock dividend
2.	Par value per common share	Cash dividend
3.	Total retained earnings	Stock split
4.	Earnings per common share	Restriction of retained earnings
5.	Number of common shares outstanding	Stock dividend
6.	Total retained earnings	Cash dividend
7.	Total paid in capital	Stock dividend
8.	Par value per common share	Stock dividend

13 years ago
25.09.2013
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