PROBLEM 3
Timber Ridge Corporationwas organized on January 1, 2013. During its first year, thecorporation issued 40,000 shares of $5 par value preferred stockand 400,000 shares of $1 par value common stock. At December 31,the company declared the following cash dividends:
2013 $ 8,000
2014 $30,000
2015 $70,000
Instructions
(a) Showthe allocation of dividends to each class of stock, assuming thepreferred stock dividend is 5% and not cumulative.
(b) Showthe allocation of dividends to each class of stock, assuming thepreferred stock dividend is 6% and cumulative.
(c) Journalize the declaration of the cashdividend at December 31, 2015 using the assumption of part(b).
(a) Preferred Common Total
2013
2014
2015
(b) Preferred Common Total
2013
2014
2015
(c)
Date
Account
Debit
Credit
PROBLEM 3
Timber Ridge Corporationwas organized on January 1, 2013. During its first year, thecorporation issued 40,000 shares of $5 par value preferred stockand 400,000 shares of $1 par value common stock. At December 31,the company declared the following cash dividends:
2013 $ 8,000
2014 $30,000
2015 $70,000
Instructions
(a) Showthe allocation of dividends to each class of stock, assuming thepreferred stock dividend is 5% and not cumulative.
(b) Showthe allocation of dividends to each class of stock, assuming thepreferred stock dividend is 6% and cumulative.
(c) Journalize the declaration of the cashdividend at December 31, 2015 using the assumption of part(b).
(a) Preferred Common Total
2013
2014
2015
(b) Preferred Common Total
2013
2014
2015
(c)
| Date | Account | Debit | Credit |
Related questions
PROBLEM 2
The following information isavailable for Grey Goose Inc.:
Beginning retainedearnings $600,000
Cash dividendsdeclared 60,000
Net income for2014 120,000
Stock dividenddeclared 15,000
Understatement of lastyear's depreciationexpense 30,000
Instructions
Based on the precedinginformation, prepare a retained earnings statement for 2014 in thebox below.
GREYGOOSE INC.
RetainedEarnings Statement
For theYear Ended December 31, 2014
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PROBLEM 3
Timber Ridge Corporationwas organized on January 1, 2013. During its first year, thecorporation issued 40,000 shares of $5 par value preferred stockand 400,000 shares of $1 par value common stock. At December 31,the company declared the following cash dividends:
2013 $ 8,000
2014 $30,000
2015 $70,000
Instructions
(a) Showthe allocation of dividends to each class of stock, assuming thepreferred stock dividend is 5% and not cumulative.
(b) Showthe allocation of dividends to each class of stock, assuming thepreferred stock dividend is 6% and cumulative.
(c) Journalize the declaration of the cashdividend at December 31, 2015 using the assumption of part(b).
(a) Preferred Common Total
2013
2014
2015
(b) Preferred Common Total
2013
2014
2015
(c)
| Date | Account | Debit | Credit |
| Dividends on Preferred and Common Stock Yosemite Bike Corp. manufactures mountain bikes and distributesthem through retail outlets in California, Oregon, and Washington.Yosemite Bike Corp. has declared the following annual dividendsover a six-year period ended December 31 of each year: 2009,$24,000; 2010, $10,000; 2011, $126,000; 2012, $100,000; 2013,$125,000; and 2014, $125,000. During the entire period, theoutstanding stockof the company was composed of 25,000 shares ofcumulative preferred 2% stock, $90 par, and 100,000 shares ofcommon stock, $4 par. Required: 1. Determine the total dividends and theper-share dividends declared on each class of stock for each of thesix years. There were no dividends in arrears on January 1, 2009.Summarize the data in tabular form. If required, round your answersto two decimal places. If the amount is zero, please enter "0".
2. Determine the average annual dividend pershare for each class of stock for the six year period. Round youranswers to two decimal places.
3. Assuming a market price of $100 for thepreferred stock and $5 for the common stock, calculate the averageannual percentage return on initial shareholders' investment, basedon the average annual dividend per share (a) for preferred stockand (b) for common stock. Round your answers to one decimalplace.
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