Accounting for cash dividends (Learning Objective 4) 10–15 min.

City Communications has the following stockholders’ equity:

City Communications Stockholders’ Equity Paid-in Capital:

Preferred Stock, 8%, $10 par, 100,000 shares authorized, 22,000 shares issued and outstanding Common Stock, $0.50 par, 500,000 shares authorized, 380,000 shares issued and outstanding Paid-in Capital in Excess of Par Total Paid-in Capital Retained Earnings Total Stockholders’ Equity

$ 220,000 190,000 640,000

$1,050,000 160,000

$1,210,000 Requirement 1. Assume the preferred stock is cumulative. Compute the amount of dividends to preferred and common shareholders for 2014 and 2015 if total dividends are

$7,600 in 2014 and $48,000 in 2015.

AppendixLO1