70.2K

Verified Solution

Link Copied!

Check my work Al December 31, 2019, the records of Hoffman Company reflected the following balances in the shareholdersequity accounts Common shares: par $14 per share: 42.000 shares outstanding Preferred shes: 8 percent, par $10 per share: 6,300 shares outstanding Retained earnings $221000 On January 1, 2020, the board of directors was considering the distribution of a $63,000 cash dividend. No dividends were paid during 2018 and 2019, Required: Determine the total and per-share amounts that would be paid to the common shareholders and to the preferred shareholders under two independent assumptions: 1-8. The preferred shares are non-cumulative. (Round your per share amount to 2 decimal places.) Total Per Share Pad to proferred shareholders Paid to common shareholders 1eb. The pretemed share are cumulative Round your per shore amount to 2 decimal places. 1-b. The preferred shares are cumulative. (Round your per share amount to 2 decimal places.) Paid to preferred wholders Paid to common shares 2. Why were the dividends per common share less for the second assumption? The total dividend amount and dividends per share of common shares were less under the second assumption because the dividends in arrears on the preferred shares had to be fulfilled before dividends could be paid for the current year O The total dividend amount and dividends per share of common shares were less under the second assumption because the dividend rate for preferred shareholders was increased 3. What factors would cause a more favourable dividend for the common shareholders? (You may select more than one answer. Single click the box with the question mark to produce o check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) 2 The preferred dividends were not in arrears The total dividend distribution was increased. 2 The preferred dividends were not cumulative The preferred dividends were in areas. The total dividend distribution was decreased

Answer & Explanation Solved by verified expert

See Answer