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The records of Hoffman Company reflected the following balancesin the stockholders' equity accounts at December 31, 2009:

Common stock,par $13 per share, 43,000 shares outstanding.
Preferred stock,10 percent, par $13 per share, 6,700 shares outstanding.
Retainedearnings, $214,000.

On January 1,2010, the board of directors was considering the distribution of a$67,000 cash dividend. No dividends were paid during 2008 and2009.

Required:

Determine the total and per share amounts that would be paid tothe common stockholders and to the preferred stockholders under twoindependent assumptions (Roundyour Dividend per share to 2 decimal places.)

a. Thepreferred stock is noncumulative.
b. The preferredstock is cumulative.
a.Noncumulative:
Preferred Common
Total dividend $
$
Dividend per share $
$

b.Cumulative:
Preferred Common
Total dividend $ $
Dividend per share $ $

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Casey Durgan
Casey DurganLv2
28 Sep 2019

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York’s outstanding stock consists of 80,000 shares of noncumulative 7.0% preferred stock with a $5 par value and also 140,000 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:

2015 total cash dividends $ 16,500

2016 total cash dividends 26,000

2017 total cash dividends 275,000

2018 total cash dividends 425,000

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. (Round your "Dividend per Preferred Share" answers to 3 decimal places.)

Par Value per Preferred Share Dividend Rate Dividend per Preferred Share Number of Preferred Shares Preferred Dividend
Annual Preferred Dividend:
Total Cash Dividend Paid Paid to Preferred Paid to Common Dividends in Arrears at year-end
2015 $16,500
2016 26,000
2017 275,000
2018 425,000
Total: $742,500 $0 $0

Dividends and Stock Splits

On January 1, 2017, Frederiksen Inc.'s Stockholders' Equitycategory appeared as follows:

Preferred stock, $80 par value, 7%, 3,000 shares
issued and outstanding		 $240,000
Common stock, $10 par value, 15,000 shares
issued and outstanding		 150,000
Additional paid-in capital—Preferred 60,000
Additional paid-in capital—Common 225,000
Total contributed capital $675,000
Retained earnings 2,100,000
Total stockholders’equity $2,775,000

The preferred stock is noncumulative and nonparticipating.During 2017, the following transactions occurred:

On March 1, declared a cash dividend of $16,800 on preferredstock. Paid the dividend on April 1.

On June 1, declared a 5% stock dividend on common stock. Thecurrent market price of the common stock was $18. The stock wasissued on July 1.

On September 1, declared a cash dividend of $0.50 per share onthe common stock; paid the dividend on October 1.

On December 1, issued a 2-for-1 stock split of common stock whenthe stock was selling for $50 per share.

Required:

1. Explain each transaction’s effect on thestockholders’ equity accounts and the total stockholders’equity.


Transaction 		Effect on total
stockholders' equity
On March 1, declared a cash dividend of $16,800 on preferredstock
Paid the dividend on April 1
On June 1, declared a 5% stock dividend on common stock
The stock was issued on July 1
On September 1, declared a cash dividend of $0.50 per share onthe common stock
Paid the dividend on October 1
On December 1, issued a 2-for-1 stock split of common stock,when the stock was selling for $50 per share

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Incorrect

2. Develop the Stockholders' Equity category ofthe December 31, 2017, balance sheet. Assume that the net incomefor the year was $650,000.

Frederiksen's Inc.
Partial Balance Sheet
December 31, 2017
Stockholders' equity
Preferred stock, $80 par, 7%, 3,000shares issued and outstanding $
Common stock, $5 par, 31,500 sharesissued and outstanding
Additional paid-incapital-preferred stock
Additional paid-in capital-commonstock
Total contributed capital $
Retained earnings
Total stockholders' equity $

Feedback

Partially correct

3. Which of the following statements isincorrect?
The value of the shares issued in the large stock dividendis added to the Retained Earnings account and deducted from theCapital Stock account.

1. Frey & Felder (F&F) brands touch the lives of peoplearound the world in 180 countries and territories. The F&Fcommunity consists of nearly 188,800 employees. In 2014, thecompany had 10 billion shares of common stock authorized, 4 billionshares issued, and 3 billion shares outstanding. Par value is $1per share. F&F has been paying a dividend for over 120 yearsand 2014 marks the 58th consecutive year that the Company hasincreased its dividend.

Required:

Assume that F&F declared a dividend of $2.53 per share onOctober 1, 2014, to stockholders of record on October 15. F&Fpaid the dividend on October 20. Prepare journal entries asappropriate for each date.

2. The records of Hollywood Company reflected the followingbalances in the stockholders' equity accounts at the end of thecurrent year:

Common stock, $12 par value, 47,000 shares outstanding

Preferred stock, 10 percent, $10 par value, 6,000 sharesoutstanding

Retained earnings, $225,000


On September 1 of the current year, the board of directors wasconsidering the distribution of an $72,000 cash dividend. Nodividends were paid during the previous two years. You have beenasked to determine dividend amounts under two independentassumptions (show computations):

a. The preferred stock is noncumulative.

b. The preferred stock is cumulative.


Required:

1. Determine the total and per share amountsthat would be paid to the common stockholders and the preferredstockholders under the two independent assumptions.


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