Question

ecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: 20Y1, $32,000; 20Y2, $64,000; 20Y3, $152,000; 20Y4, $176,000; 20Y5, $224,000; and 20Y6, $280,000. During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 20,000 shares of cumulative, preferred 4% stock, $100 par, and 100,000 shares of common stock, $20 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 per share answers to two decimal places. If the amount is zero, please enter "0".

Answer 1

Pecan Theatre's total Dividends and per-share dividends declared on Cumulative Preferred Stock and Common Stock are summarized below:

Dividends Declared:

                        20Y1      20Y2         20Y3         20Y4           20Y5        20Y6

Total          $32,000  $64,000  $152,000  $176,000  $224,000  $280,000

Preferred Stock:

Total          $80,000   $80,000     $80,000  $80,000     $80,000    $80,000

Per-share  $4               $4                  $4            $4                $4               $4

Paid          $32,000   $64,000   $144,000  $80,000    $80,000    $80,000

Arrears     $48,000    $64,000            $0            $0                $0               $0

Common Stock:

Total         $0            $0              $8,000    $96,000   $144,000  $200,000

Per-share $0            $0                $0.08         $0.96         $1.44         $2.00

Data and Calculations:

Outstanding Stock:

20,000 shares 4% Cumulative Preferred Stock at $100 par value = $2 million

100,000 shares Common Stock at $20 par value = $2 million

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