Exercise 15-6
Bridgeport Limited’s ledger shows the following balances onDecember 31, 2020:
| Preferred shares outstanding: 31,000 shares | | $ | 837,000 |
| Common shares outstanding: 47,000 shares | | | 3,478,000 |
| Retained earnings | | | 955,330 |
A.) Assuming that the directors decide to declare totaldividends in the amount of $477,665, determine how much each classof shares should receive if the preferred shares are cumulative andfully participating. Note that one year’s dividends are in arrearson the preferred shares, which pay a dividend of $1.35 pershare.
| Preferred | Common | Total |
| Dividend | $ | $ | $ |
B.) Assuming that the directors decide to declare totaldividends in the amount of $477,665, determine how much each classof shares should receive if the preferred shares are non–cumulativeand non–participating. Note that one year’s dividends are inarrears on the preferred shares, which pay a dividend of $1.35 pershare.
| Preferred | Common | Total |
| Dividend | $ | $ | $ |
C.) Assuming that the directors decide to declare totaldividends in the amount of $477,665, determine how much each classof shares should receive if the preferred shares are non–cumulativeand are participating in distributions in excess of a 9% dividendrate on the common shares. Note that one year’s dividends are inarrears on the preferred shares, which pay a dividend of $1.35 pershare.
| Preferred | Common | Total |
| Dividend | $ | $ | $ |
