Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
The Grand Terminal Corporation had the following classes of shares outstanding as of December 31, 20x5 : Ordinary shares, P20 par value, 20,000 shares outstanding Preference shares, 8 percent, P100 par value, cumulative, 2,000 shares outstanding No dividends were paid on preference shares for the year 20x3 and 20x4
The Grand Terminal Corporation had the following classes of shares outstanding as of December 31, 20x5 :
- Ordinary shares, P20 par value, 20,000 shares outstanding
- Preference shares, 8 percent, P100 par value, cumulative, 2,000 shares outstanding
No dividends were paid on preference shares for the year 20x3 and 20x4. On December 31, 20x5, a total of P200,000 cash dividend was declared.
Compute the amount of dividends payable for prefence shares.
Expert Solution
Computation of Amount of Dividends Payable for Preference Shares:
Dividend for Preference Shareholders = 2,000 shares * $100 * 8% = $16,000
As preferred stocks are cumulative in nature, then preferred stock will receive dividend for 20x3, 20x4 and 20x5.
Preferred Dividend for 3 years = 3 * $16,000 = $48,000
And remaining dividend will be paid to common stockholders.
So, Amount of Dividends Payable for Preference Shares is $48,000.
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
