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Pennington Corporation

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The outstanding capital stock of Pennington Corporation consists of 2,100 shares of $109 par value, 6% preferred, and 5,800 shares of $58 par value common.;Assuming that the company has retained earnings of $85,000, all of which is to be paid out in dividends, and that preferred dividends were not paid during the 2 years preceding the current year, state how much each class of stock should receive under each of the following conditions.;(a) The preferred stock is noncumulative and nonparticipating.;Preferred;Common;$ $;(b) The preferred stock is cumulative and nonparticipating.;Preferred;Common;$ $;(c) The preferred stock is cumulative and participating. (Round rate of participation to 4 decimal places, e.g. 5.1234. Round final answer to 0 decimal places, e.g. 25,320.);Preferred;Common;$ $;(Preferred Dividends);Martinez Company's ledger shows the following balances on December 31, 2012.;5% Preferred stock-$10 par value, outstanding 28,760 shares $287,600;Common stock-$100 par value, outstanding 43,140 shares 4,314,000;Retained earnings 905,940;Assuming that the directors decide to declare total dividends in the amount of $382,508, determine how much each class of stock should receive under each of the conditions stated below. One year's dividends are in arrears on the preferred stock.;(a) The preferred stock is cumulative and fully participating.;Preferred;Common;$ $;(b) The preferred stock is noncumulative and nonparticipating.;Preferred;Common;$ $;(c) The preferred stock is noncumulative and is participating in distributions in excess of a 7% dividend rate on the common stock. (Note: Do not round rate of participation. Round final answers to zero decimal places, e.g. 12,310.);Preferred;Common;$ $

 

Paper#79573 | Written in 18-Jul-2015

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