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hjlf
3 years ago
15

Rachel's Designs has 1,800 shares of 6%, $50 par value cumulative preferred stock issued at the beginning of 2019. All remaining

shares are common stock. Due to cash flow difficulties, the company was not able to pay dividends in 2019 or 2020. The company plans to pay total dividends of $18,000 in 2021. How much of the $18,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders
Business
2 answers:
stepladder [879]3 years ago
8 0

Answer:

Dividend to Preferred Stockholder = $16,200

Dividend to Preferred Stockholder = $1,800

Explanation:

Preferred stockholders has an advantage that they are paid first when there is any dividend is announced. The residual dividend will be divided into the common stockholders. Any prior years due dividend and current years dividend associated with preferred share will be paid first.

As per given data

Preferred stock value = 1,800 x $50 = $90,000

Dividend on preferred shares = $90,000 x 5% = $5,400 per year

As in 2019 and 2020 no dividend was paid so $10,800 is due in respect of preferred dividend.

2021

Total preferred dividend = Preferred Dividend arrears + Current year preferred dividend = $10,800 + $5,400 = $16,200

Dividend declared = $18,000

Dividend Payment to common stockholders = Dividend Declared - Total due preferred dividend = $18,000 - $1,6200 = $1,800

Dividend of $16,200 will be paid to preferred stockholders and dividend of $1,800 for common stockholders in 2021.

Advocard [28]3 years ago
5 0

Answer:

Preferred dividend in arrears = $10,800

Preferred dividend for 2021 = $5,400

Remaining dividends to common stockholders = 1,800

Explanation:

The computation of preferred stockholders and common stockholders is shown below:-

Preferred dividend in arrears for 2019 and 2020   $10,800

(1,800 × $50 × 6% × 2)

Preferred dividend for 2021                                       $5,400

(1,800 × $50 × 6%)

Remaining dividends to common stockholders         1,800

Total dividends                                                             $18,000

Therefore in every year Cumulative dividend will arise whether paid or not.

All dividend should be paid to preferred stock, if something is left will be paid to common stockholders.

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Answer:

C. Embargo

Explanation:

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2 years ago
When a person places him or herself in a position in which he or she might be exploited by another, and does so willingly with t
dalvyx [7]

Answer:

vulnerability

Explanation:

When an individual is vulnerable, it means that he/she is being exposed to the possibility of being physically or emotionally wounded.

Usually individuals place themselves in a position of vulnerability in a relationship when they have a very high degree of affection for the other person and assume the risk of being emotionally exposed.

4 0
3 years ago
Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2021. The provisions of the plan were not made ret
Valentin [98]

Answer:

1. Projected Benefit Obligation 2021 $260,000

Projected Benefit Obligation 2022 $623,000

2.Plan assets 2021 $270,000

Plan assets 2022 $577,000

3. Pension expense 2021 $260,000

Pension expense 2022 $336,000

4.Net pension asset 2021 $ 10,000

Net pension liability2022 $46,000

Explanation:

1. Computation for Projected benefit obligation

for 2021 and 2022

Projected Benefit Obligation 2021

($)

Balance, January 1, 2021 $0

Service cost $260,000

Interest cost (5% x $0) $0

Benefits paid ($0)

Balance, December 31, 2021 $260,000

Projected Benefit Obligation 2022

Balance, December 31, 2021 $260,000

Service cost $350,000

Interest cost $13,000

(5% x $260,000)

Benefits paid($0)

Balance, December 31, 2022 $623,000

2. Computation for 2021 and 2022 Plan assets

Plan assets 2021

Balance, January 1, 2021 $ 0

Actual return on plan assets (10% x $0) $0

Contributions, 2021 $$270,000

Benefits paid ($0)

Balance, December 31, 2021 $270,000

Plan assets 2022

Balance, December 31, 2021 $270,000

Actual return on plan assets $27,000

(10% x $270,000)

Contributions, 2022 $280,000

Benefits paid (0)

Balance, December 31, 2022 $577,000

3. Computation for Pension expense for 2021 and 2022

Pension expense – 2021

Service cost $260,000

Interest cost (5% x $0) $0

Expected return on the plan assets $0

(10% x $0)

Pension expense $260,000

Pension Expense – 2022

Service cost $350,000

Interest cost $13,000

(5% x $260,000)

Expected return on the plan assets($27,000)

(10% x $270,000)

Pension expense $336,000

4. Computation for Net pension asset/liability for 2021 and 2022

2021

PBO $260,000

Less Plan assets $270,000

Net pension asset, Dec. 31, 2021 $ 10,000

2022

PBO $623,000

Less Plan assets $577,000

Net pension liability, Dec. 31, 2022 $ 46,000

3 0
3 years ago
The president of the Micro Brewing Corporation asks you, as the company economist, to forecast changes in consumer beer purchase
umka21 [38]

Answer:

It is more profitable to raise the selling price by $2.

Explanation:

To determine whether the company should raise the selling price, we need to determine the effect on income. <u>The best option is the one with the higher sales revenue.</u>

Sales revenue= selling price * number of units

<u>Current:</u>

Sales revenue= 5.5*2,200= $12,100

<u>Proposal:</u>

Sales revenue= 7.5*1,800= $13,500

It is more profitable to raise the selling price by $2.

7 0
3 years ago
J&amp;J Foods wants to issue 5.4 percent preferred stock with a stated liquidating value of $100 a share. The company has determ
Studentka2010 [4]

Answer:

$65.85

Explanation:

Calculation for What should the offer price be

Using this formula

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Let plug in the formula

Offer price = (0.054 × $100) / 0.082

Offer price=5.4/0.082

Offer price = $65.85

Therefore the offer price should be $65.85

3 0
3 years ago
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