50.1K

Verified Solution

Link Copied!

Dividends on Preferred and Common Stock

Yosemite Bike Corp. manufactures mountain bikes and distributes them through retail outlets in California, Oregon, and Washington. Yosemite Bike has declared the following annual dividends over a six-year period ended December 31 of each year: 20Y1, $24,500; 20Y2, $9,750; 20Y3, $118,250; 20Y4, $97,500; 20Y5, $112,500; and 20Y6, $162,500. During the entire period, the outstanding stock of the company was composed of 25,000 shares of cumulative preferred 2% stock, $85 par, and 100,000 shares of common stock, $4 par.

Required:

1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of 20Y1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0".

Selected Stock Transactions

Diamondback Welding & Fabrication Corporation sells and services pipe welding equipment in Illinois. The following selected accounts appear in the ledger of Diamondback Welding & Fabrication at the beginning of the current year:

Preferred 2% Stock, $175 par (90,000 shares authorized, 45,000 shares issued)	$7,875,000
Paid-In Capital in Excess of ParPreferred Stock	945,000
Common Stock, $15 par (500,000 shares authorized, 300,000 shares issued)	4,500,000
Paid-In Capital in Excess of ParCommon Stock	590,000
Retained Earnings	29,489,000

During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows:

1. Purchased 30,000 shares of treasury common for $16 per share.
2. Sold 15,000 shares of treasury common for $19 per share.
3. Issued 23,000 shares of preferred 2% stock at $192.
4. Issued 50,000 shares of common stock at $18, receiving cash.
5. Sold 10,000 shares of treasury common for $14 per share.
6. Declared cash dividends of $3.50 per share on preferred stock and $0.04 per share on common stock.
7. Paid the cash dividends.

Required:

Journalize the entries to record the transactions.

If an amount box does not require an entry, leave it blank.

Dividends on Preferred and Common Stock Yosemite Bike Corp. manufactures mountain bikes and distributes them through retail outlets in California, Oregon, and Washington. Yosemite Bike has declared the following annual dividends over a six-year period ended December 31 of each year: 20Y1, $24,500; 20Y2, $9,750; 20Y3, $118,250; 2014, $97,500; 2085, $112,500; and 2086, $162,500. During the entire period, the outstanding stock of the company was composed of 25,000 shares of cumulative preferred 2% stock, $85 par, and 100,000 shares of common stock, $4 par. Required: 1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of 2011. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0". Preferred Dividends Common Dividends Total Year Dividends Total Per Share Total Per Share 450 9,750 0.96 x 0.40 0 0 0 0 20Y1 $24,500 2012 9,750 20Y3 118,250 20Y5 112,500 20Y6 162,500 2. Determine the average annual dividend per share for each class of stock for the six-year period. Round your answers to two decimal places. Average annual dividend for preferred stock $ per share Average annual dividend for common stock $ per share 3. Assuming a market price of $100 for the preferred stock and $5 for the common stock, determine the average annual percentage return on initial shareholders' investment, based on the average annual dividend per share (A) for preferred stock and (B) for common stock. Round your answers to two decimal places. Preferred stock Common stock % Selected Stock Transactions Diamondback Welding & Fabrication Corporation sells and services pipe welding equipment in Illinois. The following selected accounts appear in the ledger of Diamondback Welding & Fabrication at the beginning of the current year: 4,500,000 Preferred 2% Stock, $175 par (90,000 shares authorized, $7,875,000 45,000 shares issued) Paid-In Capital in Excess of Par-Preferred Stock 945,000 Common Stock, $15 par (500,000 shares authorized, 300,000 shares issued) Paid-In Capital in Excess of Par-Common Stock 590,000 Retained Earnings 29,489,000 During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows: a. Purchased 30,000 shares of treasury common for $16 per share. b. Sold 15,000 shares of treasury common for $19 per share. c. Issued 23,000 shares of preferred 2% stock at $192. d. Issued 50,000 shares of common stock at $18, receiving cash. e. Sold 10,000 shares of treasury common for $14 per share. f. Declared cash dividends of $3.50 per share on preferred stock and $0.04 per share on common stock. g. Paid the cash dividends. Required: Journalize the entries to recora ne transactions. If an amount box does not require an entry, leave it blank

Answer & Explanation Solved by verified expert

See Answer