Acc306 Intermediate Accounting: P18-9 The shareholders' equity of Kramer Industries includes

Acc306 Intermediate Accounting
P18-9 Effect of preferred stock characteristics on dividends
The shareholders' equity of Kramer Industries includes the data shown below. During 2012, cash dividends of $150 million were declared. Dividends were not declared in 2010 or 2011. ($ in millions) Common stock 200 Paid-in capital - excess of par, common 800 Preferred stock, 10%, nonparticipating 100 Paid-in capital - excess of par, preferred 270

Required:
Determine the amount of dividends payable to preferred shareholders and to common shareholders under each of the following two assumptions regarding the characteristics of the preferred stock. Assumption A—The preferred stock is noncumulative. Assumption B—The preferred stock is cumulative.
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