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Pranks, Inc. is a manufacturer of joke and novelty products for perpetrators of practical jokes. The corporation has paid several cash dividends throughout Year
Pranks, Inc. is a manufacturer of joke and novelty products for perpetrators of practical jokes. The corporation has paid several cash dividends throughout Year 6, the current year. It is also declaring a stock dividend to its stockholders as the calendar year-end approaches. You've been brought in as a consultant to assist with this process, and also to help determine whether some missing information can be determined before the distribution of the stock dividend is made. The company has two classes of stock: common stock and cumulative preferred stock. Number of common shares authorized Number of common shares issued Par value of common shares Par value of cumulative preferred shares Paid-in capital in excess of par-common stock 800,000 650,000 $20 $30 $7,000,000 Paid-in capital in excess of par-preferred stock $0 Total retained earnings before the stock dividend is declared No treasury share have been reissued. $33,500,000 Preferred Dividends Common Dividends Total Cash Year Dividends Total Per Share Total Per Share Year 1 30,000 30,000 0.201 0 0.00 Year 2 54,000 54,000 0.36 0.00 Year 3 67,000 $1,000 0.34 36,000 0.09 Year 4 105,000 45,000 0.3 60,000 0.15 Year 5 117,000 45,000) 0.3 72,000 0.18 Year 6 165,000 45,000 0.3 120,000 0.3 Cash Dividends The accounting manager for the company prepared the schedule of cash dividends paid from Year 1 to Year 6 on the Pranks, Inc. panel. However, one of the reasons for Pranks, Inc.'s missing information is that the manager is away on vacation and is unreachable by phone, because he is backpacking on a remete island that does not
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