Pecan Theatre Inc.
Total dividends per type share:
# Declared //Preferred //Arrears* //Common
1- 64,000 64,000 96,000
2- 192,000 192,000 64,000
3- 304,000 256,000 48,000
4- 352,000 160,000 192,000
5- 448,000 160,000 288,000
6- 560,000 160,000 400,000
Dividends per share:
Year //Preferred //Common
1 1.6 0
2 4.8 0
3 6.4 0.48
4 4 1.92
5 4 2.88
6 4 4
Insufficient dividends will result in arrears for subsequent years because preferred dividends are cumulative.
40,000 shares x $100 x 4% = $ 160,000
* We declare that 64,000 of the chosen should receive 160,000, which adds 96,000 to the period after.
Afterward, we declare 192,000.
We settle the 160,000 for the year and reduce the 32,000 arrears.
The remainder flows to common shares after we pay the current year and the arrears.
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The complete question is ''Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: Year 1, $80,000; Year 2, $90,000; Year 3, $150,000; Year 4, $150,000; Year 5, $160,000; and Year 6, $180,000. During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 250,000 shares of cumulative, preferred 2% stock, $20 par, and 500,000 shares of common stock, $15 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 Year 1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0".
