Solution-Find how much will preferred and common

Find how much will preferred and common stockholders receive

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Reference no: EM132807681

Plover Corporation had the following equity accounts on January 1, 2020:

Share Capital-Ordinary (£1 par) £400,000,

Share Premium-Ordinary £500,000, and

Retained Earnings £100,000.

In 2020, the company had the following treasury share transactions.

Mar. 1 Purchased 5,000 shares at £7 per share.
June 1 Sold 800 shares at £10 per share.
Sept. 1 Sold 1,700 shares at £9 per share.
Dec. 1 Sold 1,000 shares at £5 per share.

Plover Corporation uses the cost method of accounting for treasury shares. In 2020, the company reported net income of £80,000.

Mihoyo, Inc., has $800,000 of 8% preference shares and $1,200,000 of ordinary shares outstanding, each having a par value of $10 per share. No dividends have been paid or declared during 2018 and 2019. As of December 31, 2020, it is desired to distribute $488,000 in dividends.

Instructions:

Problem 1: How much will the preferred and common stockholders receive under each of the following assumptions:

(a) The preference share is noncumulative
(b) The preference share is cumulative

Reference no: EM132807681

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Find how much will preferred and common stockholders receive

Reference no: EM132807681

Reference no: EM132807681

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