A Company Was Organized in January 2009 and Has 2,000

question 77

Essay

A company was organized in January 2009 and has 2,000 shares of $100 par value,10%,nonparticipating preferred stock outstanding and 30,000 shares of $10 par value common stock outstanding.It has declared and paid cash dividends each year as shown below.Calculate the total dividends distributed to each class of stockholder under each of the assumptions given.

---

Definitions:

Debit

An accounting entry that increases asset or expense accounts, or decreases liability, equity, or revenue accounts.

Credit

Credit in finance represents a contractual agreement in which a borrower receives something of value now and agrees to repay the lender at a later date, often with interest.

Transaction

A financial event that changes the balance of two or more accounts.

Debt Ratio

Debt ratio is a financial ratio that measures the extent of a company's leverage by comparing its total debt to its total assets.