Pro Com Ltd. issues 8,000, $5 cumulative preferred shares at $66 each and 15,000 common shares at
Question:
2016
Jan. 10 Paid $12,000 of annual dividends to preferred shareholders.
2017
Jan. 10 Paid annual dividend to preferred shareholders and a $4,000 dividend to common shareholders.
Mar. 1 The preferred shares were converted into common shares.
Instructions
(a) Journalize each of the transactions.
(b) Are there any additional reporting requirements regarding preferred share dividends in either 2016 or 2017?
(c) What factors affect preferred shareholders' decision to convert their shares into common shares?
TAKING IT FURTHER
Why might investors be willing to pay more for preferred shares that have a conversion option?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Accounting Principles
ISBN: 978-1119048473
7th Canadian Edition Volume 2
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
Question Posted: