A Dividends on Preferred and Common Stock 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 20Y1, $40,000 20Y2, $80,000 20Y3, $180,000 20Y4, $220,000 20Y5, $290,000 and 20Y6, $350,000 During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 25,000 shares of cumulative, preferred 4 stock, $100 par, and 100,000 shares of common stock, $10 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 20Y1 Summarize the data in tabular form If required, round your answers to two decimal places If the amount is zero, please enter 0 Preferred Dividends Common Dividends Year Total Dividends Total Per Share Total Per Share 20Y1 $ 40,000 20Y2 80,000 20Y3 180,000 20Y4 220,000 20Y5 290,000 20Y6 350,000 2 Determine the average annual dividend per share for each class of stock for the six year period If required, round your answers to two decimal places Average annual dividend for preferred Average annual dividend for common 3 Assuming a market price per share of $328 for the preferred stock and $14 for the common stock, determine the average annual percentage return on initial shareholders investment, based on the average annual dividend per share (a) for preferred stock and (b) for common stock Round your answers to two decimal places Preferred stock Common stock B The following selected accounts appear in the ledger of Parks Construction Inc at the beginning of the current year Preferred 1 Stock, $50 par (100,000 shares authorized, 79,400 shares issued) $3,970,000 Paid In Capital in Excess of ParPreferred Stock 150,860 Common Stock, $3 par (5,000,000 shares authorized, 2,100,000 shares issued) 6,300,000 Paid In Capital in Excess of ParCommon Stock 1,260,000 Retained Earnings 33,959,000 During the year, the corporation completed a number of transactions affecting the stockholders equity They are summarized as follows a Issued 518,800 shares of common stock at $7, receiving cash b Issued 9,800 shares of preferred 1 stock at $61 c Purchased 48,300 shares of treasury common for $7 per share d Sold 19,500 shares of treasury common for $9 per share e Sold 5,000 shares of treasury common for $6 per share f Declared cash dividends of $0 50 per share on preferred stock and $0 08 per share on common stock g Paid the cash dividends Journalize the entries to record the transactions Refer to the Chart of Accounts for exact wording of account titles CHART OF ACCOUNTS Parks Construction Inc General Ledger ASSETS 110 Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Inventory 145 Office Supplies 151 Prepaid Insurance 181 Land 193 Equipment 194 Accumulated Depreciation Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 226 Interest Payable 231 Cash Dividends Payable 241 Salaries Payable 261 Mortgage Note Payable EQUITY 236 Stock Dividends Distributable 311 Common Stock 312 Paid In Capital in Excess of Par Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid In Capital in Excess of Par Preferred Stock 331 Paid In Capital from Sale of Treasury Stock 340 Retained Earnings 351 Cash Dividends 352 Stock Dividends REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 515 Credit Card Expense 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Selling Expenses 534 Rent Expense 535 Insurance Expense 536 Office Supplies Expense 537 Organizational Expenses 562 Depreciation Expense Equipment 590 Miscellaneous Expense 710 Intere

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 13, 2024

A - Dividends on Preferred and Common Stock Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the

A - Dividends on Preferred and Common Stock

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: 20Y1, $40,000; 20Y2, $80,000; 20Y3, $180,000; 20Y4, $220,000; 20Y5, $290,000; and 20Y6, $350,000. During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 25,000 shares of cumulative, preferred 4% stock, $100 par, and 100,000 shares of common stock, $10 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 20Y1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0".

Preferred Dividends

Common Dividends

Year

Total Dividends

Total

Per Share

Total

Per Share

20Y1

$ 40,000

??????

20Y2

80,000

??????

20Y3

180,000

??????

20Y4

220,000

??????

20Y5

290,000

??????

20Y6

350,000

??????

2. Determine the average annual dividend per share for each class of stock for the six-year period. If required, round your answers to two decimal places.

Average annual dividend for preferred	??????
Average annual dividend for common	??????

3. Assuming a market price per share of $328 for the preferred stock and $14 for the common stock, determine the average annual percentage return on initial shareholders investment, based on the average annual dividend per share (a) for preferred stock and (b) for common stock.

Round your answers to two decimal places.

Preferred stock	???????
Common stock	???????

B - The following selected accounts appear in the ledger of Parks Construction Inc. at the beginning of the current year:

Preferred 1% Stock, $50 par (100,000 shares authorized, 79,400 shares issued)	$3,970,000
Paid-In Capital in Excess of ParPreferred Stock	150,860
Common Stock, $3 par (5,000,000 shares authorized, 2,100,000 shares issued)	6,300,000
Paid-In Capital in Excess of ParCommon Stock	1,260,000
Retained Earnings	33,959,000

During the year, the corporation completed a number of transactions affecting the stockholders equity. They are summarized as follows:

a.	Issued 518,800 shares of common stock at $7, receiving cash.
b.	Issued 9,800 shares of preferred 1% stock at $61.
c.	Purchased 48,300 shares of treasury common for $7 per share.
d.	Sold 19,500 shares of treasury common for $9 per share.
e.	Sold 5,000 shares of treasury common for $6 per share.
f.	Declared cash dividends of $0.50 per share on preferred stock and $0.08 per share on common stock.
g.	Paid the cash dividends.

Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

Parks Construction Inc.

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
131	Notes Receivable
132	Interest Receivable
141	Inventory
145	Office Supplies
151	Prepaid Insurance
181	Land
193	Equipment
194	Accumulated Depreciation-Equipment

	LIABILITIES
210	Accounts Payable
221	Notes Payable
226	Interest Payable
231	Cash Dividends Payable
241	Salaries Payable
261	Mortgage Note Payable

	EQUITY
236	Stock Dividends Distributable
311	Common Stock
312	Paid-In Capital in Excess of Par-Common Stock
315	Treasury Stock
321	Preferred Stock
322	Paid-In Capital in Excess of Par-Preferred Stock
331	Paid-In Capital from Sale of Treasury Stock
340	Retained Earnings
351	Cash Dividends
352	Stock Dividends

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Goods Sold
515	Credit Card Expense
520	Salaries Expense
531	Advertising Expense
532	Delivery Expense
533	Selling Expenses
534	Rent Expense
535	Insurance Expense
536	Office Supplies Expense
537	Organizational Expenses
562	Depreciation Expense-Equipment
590	Miscellaneous Expense
710	Intere