Write a statement to address the stockholders’ concerns
January 3, 2018
The total stockholders’ equity
January 3, 2018

The preferred stock is noncumulative, nonparticipating

The Stockholders’ Equity category of Rausch Company’s balance sheet as of December 31, 2017, appeared as follows: Preferred stock, $100 par, 8%, 2,000 shares issued and outstanding …………….$ 200,000 Common stock, $10 par, 40,000 shares issued and outstanding…………………… 400,000 Additional paid-in capital ……………………………………………………………500,000 Total contributed capital …………………………………………………………$1,100,000 Retained earnings ……………………………………………………………………900,000 Total stockholders’ equity ………………………………………………………..$2,000,000 The notes to the financial statements indicate that dividends were not declared or paid for 2015 or 2016. Rausch wants to declare a dividend of $118,000 for 2017. Required Determine the total and the per-share amounts that should be declared to the preferred and common stockholders under the following assumptions: 1. The preferred stock is noncumulative, nonparticipating. 2. The preferred stock is cumulative, nonparticipating. View Solution:
The Stockholders Equity category of Rausch Company s balance sheet as

 

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