Use the Following Facts to Determine How Much Each of the Three

question 33

Essay

Use the following facts to determine how much each of the three classes of shares receives of the $1,000,000 cash dividend.
Facts: In 2019 Blueberry Juice Inc.declared $1,000,000 in cash dividends.Its capital structure includes 300,000 common shares; 200,000 cumulative preferred shares "A" each entitled to an annual dividend of $1.00; and 50,000 non-cumulative preferred shares "B" each entitled to an annual dividend of $3.00.The prescribed dividends on both series of preferred shares were paid in 2018; there are no dividends in arrears.

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Definitions:

Periodic Inventory System

An inventory accounting system where inventory levels are updated and cost of goods sold is calculated at the end of an accounting period.

Perpetual Inventory System

A method of keeping track of inventory in real-time, where inventory levels are updated after every sale or purchase transaction.

FOB Shipping Point

A term used in shipping agreements indicating that the buyer is responsible for the cost of shipping and risk of loss from the shipping point.

Credit Terms

Conditions under which credit is extended by a seller to a buyer, detailing the repayment period, any discounts for early payment, and penalties for late payment.