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audreymarie2940
14.04.2020 •
Business
When Crossett Corporation was organized in January Year 1, it immediately issued 4,000 shares of $50 par, 6 percent, cumulative preferred stock and 50,000 shares of $20 par common stock. Its earnings history is as follows: Year 1, net loss of $35,000; Year 2, net income of $125,000; Year 3, net income of $215,000. The corporation did not pay a dividend in Year 1. Required a. How much is the dividend arrearage as of January 1, Year 2?
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Ответ:
Based on the information given the amount of dividend arrearage as of January 1, Year 2 is $12,000.
Using this formula
Dividend arrearage=Shares issued× Par value× Rate
Where:
Shares issued=4,000 shares
Par value=$50 par
Rate=6% or 0.06
Let plug in the formula
Dividend arrearage=4,000×$50×0.06
Dividend arrearage=$12,000
Inconclusion the amount of dividend arrearage as of January 1, Year 2 is $12,000.
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Ответ:
The correct answer is $12,000.
Explanation:
According to the scenario, the given data are as follows:
Shares issues On Jan.1 Year 1 = 4,000 shares
Par value of shares = $50 par
Cumulative preferred stock = 6%
So, we can calculate the dividend arrearage as of January 1, Year 2 by using following formula:
Dividend as of Jan.1, year 2 = Shares issues On Jan.1 Year 1 × Par value of shares × Cumulative preferred stock
= 4,000 × $50 × 6%
= $12,000
Ответ: