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General Accounting Discussions: College Student Needs Help

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    Norton's outstanding stock consists of (a) 13,000 shares of cumulative 8% preferred stock with a $10 par value and (b) 32,500 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends.

    2009 $8000
    2010 $24000
    2011 $120000
    2012 $197000

    Determine the amount of dividends paid each year to each of the two classes of stockholders assuming that the preferred stock is cumulative.

    Year Preferred Common
    2009 $8000 $0
    2010 $ ? $ ?
    2011 $10400 $109600
    2012 $10400 $186600

    I can not figure out the year 2010 can anybody help me?
    thanks
    2012
    • CommentAuthorArcSine
    • CommentTimeFeb 3rd 2010
     
    By the terms of the stock, the preferreds are entitled to 10 x 0.08 x 13,000 = $10,400 each year. In the first year they got only $8K, leaving a "carryover" of $2,400 of unpaid pfd dividends to the second year.

    So the total 2nd-year payout of $24,000 would be allocated as: [1] $2,400 to satisfy the carryover to the pfds; [2] $10,400 to the pfds as their 2nd-year dividend; and finally [3] the residual of $11,200 to the commons.
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    Wow a light bulb just went off. I was making a stupid mistake, thanks for the help ArcSine.
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    Mike Arcsine always help others and i love his nature!
    • CommentAuthorexcel
    • CommentTimeFeb 6th 2010
     
    HELLO ACCOUNTING COACH,I'M A STUDENT OF A POLYTECHNIC HAVE BEEN THAUGHT MUCH ON ACCOUNTING BUT I WANT TO IMPROVE MYSELF BUT DON'T KNOW HOW,THAT IS MEANS AND MEDIUM FOR SELF DEVELOPMENT ALSO NEEDS PROFESSIONAL ADVICE FROM YOU THAT WILL ADD TO MY MANAGERIAL SKILLS.
    Thankful People: adiba
  6.  
    excel i must say that you can make your future brighter and i think you have started well in my view because you join this forum which is the best server for you. you have to study some other accounting sites and forums and study the accounting and bookkeeping services and other important thing that can enhance you knowledge and skill in accounting.
    There are two links visit there and understand the working of accounting and their services!

    http://www.avicennaaccounting.com
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    these two links will help you!
    Thanks for sharing!

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