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n200080 [17]
3 years ago
13

Colliers, Inc., has 100,000 shares of cumulative preferred stock outstanding. The preferred stock pays dividends in the amount o

f $2 per share, but because of cash flow problems, the company did not pay any dividends last year. The board of directors plans to pay dividends in the amount of $600,000 this year. Required: What amount will go to preferred stockholders? How much will be available for common stock dividends?
Business
1 answer:
rodikova [14]3 years ago
8 0

Answer:

Preference dividend = $2 x 100,000 shares x 2 years

Preference dividend = $400,000

The dividend paid to common stockholders = $600,000 - $400,000

                                                                         = $200,000

Explanation:

Dividends paid on preference shares are cumulative in nature because preference shares are fixed income securities. The dividends not paid last year would be paid this year. This is the rationale behind the multiplication of preference dividend by 2 years.

The dividend paid to common stockholders is the difference between the total dividend and dividend paid to preferred stockholders.

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Dividends received for equity securities in which the investor lacks the ability to participate in the decisions of the investee
erastovalidia [21]

Answer:

False.

Explanation:

When the investor does not have decision- making power in the business, his dividend payment process is not different from any other shareholder.

When profits are declared the company debits Retained Earnings (profits) for the divedend amount, and credited to Dividends Payable.

Dividend Payable is then debitted and Cash will be credited to show money has gone out.

4 0
3 years ago
The present national accounting system does not reflect changes in:
Rama09 [41]
Umm I'd have to say c or d
7 0
3 years ago
Machinery purchased for $64,200 by Sheridan Co. in 2016 was originally estimated to have a life of 8 years with a salvage value
ArbitrLikvidat [17]

Answer:

Sheridan Co.

a. It is not necessary to correct the prior year's depreciation.  Depreciation is an accounting estimate and does not require the adjustment of prior year's accounts when there is a correction in its estimates.

b. Entry to record depreciation for 2021:

Debit Depreciation Expense $4,387

Credit Accumulated Depreciation $4,387

To record the depreciation expense for the year.

Explanation:

a) Data and Calculations:

Purchase of machinery in 2016 = $64,200

Original estimated useful life = 8 years

Salvage value = $4,280

Depreciation amount = $59,920 ($64,200 - $4,280)

Depreciation expense per year = $7,490 ($59,920/8)

Accumulated depreciation for 5 years = $37,450

Net book value = $26,750 ($64,200 - $37,450)

Remaining estimated useful life = 5 years

Salvage value = $4,815

New depreciable amount = $21,935 ($26,750 - $4,815)

Depreciation expense per year = $4,387 ($21,935/5)

4 0
3 years ago
To what degree, if at all, is a significant deficiency related to a material weakness? It is less severe than a material weaknes
Brut [27]

Answer: It is less severe than a material weakness

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A SIGNIFICANT DEFICIENCY is described as a deficiency or an amalgamation of deficiencies that are NOT as severe as a MATERIAL WEAKNESS ( which is quite serious and must be reported to the Audit Committee and be reflected in the financial statements) but still important enough for those people in charge of the company's financial records to take notice.

5 0
2 years ago
What problem makes public goods necessary?
NARA [144]
There are several problems that make public goods necessary, but the primary one is that without access to certain public goods and services like parks and schools, poor people would have practically no chance at advancement. 
3 0
3 years ago
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