EX 13-2 Dividends per share
Wings Inc., a software development firm, has stock outstanding as follows: 25,000 shares of cumulative 1%, preferred stock of $40 par, and 50,000 shares of $120 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $7,500; second year, $10,500; third year, $25,000; fourth year, $60,000. Calculate the dividends per share on each class of stock for each of the four years.
Answer:
1st Year 2nd Year 3rd Year 4th Year
a. Total dividend declared.................. $ 7,500 $ 10,500 $ 25,000 $ 60,000
Preferred dividend (current)........... $ 7,500 $ 8,000 $ 10,000* $ 10,000
Preferred dividend in arrears......... — 2,500 2,000 —
b. Total preferred dividends............... $ 7,500 $ 10,500 $ 12,000 $ 10,000
Preferred shares outstanding........ ÷ 25,000 ÷ 25,000 ÷ 25,000 ÷ 25,000
Preferred dividend per share ......... $ 0.30 $ 0.42 $ 0.48 $ 0.40
*$10,000 = 25,000 shares × $40 × 1%
Dividend for common shares
(a. – b.).............................................. $ — $ — $ 13,000 $ 50,000
Common shares outstanding ........ ÷ 50,000 ÷ 50,000
Common dividend per share.......... $ 0.26 $ 1.00
Answer:
1st Year 2nd Year 3rd Year 4th Year
a. Total dividend declared.................. $ 7,500 $ 10,500 $ 25,000 $ 60,000
Preferred dividend (current)........... $ 7,500 $ 8,000 $ 10,000* $ 10,000
Preferred dividend in arrears......... — 2,500 2,000 —
b. Total preferred dividends............... $ 7,500 $ 10,500 $ 12,000 $ 10,000
Preferred shares outstanding........ ÷ 25,000 ÷ 25,000 ÷ 25,000 ÷ 25,000
Preferred dividend per share ......... $ 0.30 $ 0.42 $ 0.48 $ 0.40
*$10,000 = 25,000 shares × $40 × 1%
Dividend for common shares
(a. – b.).............................................. $ — $ — $ 13,000 $ 50,000
Common shares outstanding ........ ÷ 50,000 ÷ 50,000
Common dividend per share.......... $ 0.26 $ 1.00
