Reference no: EM132951265
Question - Vios Company began operations in January 2015 and had the following reported net income or loss for each of its five years of operations:
2015 - 1,500,000 loss
2016 - 1,300,000 loss
2017 - 1,200,000 loss
2018 - 4,500,000 income
2019 - 9,000,000 income
On December 31, 2019, the capital accounts were as follows:
Preference shares (P100 par, 12%, 100,000 shares) 10,000,000
Preferred shares (P100 par, 10% 50,000 shares) 5,000,000
Ordinary shares (P10 par, 1,000,000 shares) 10,000,000
Vios has never paid cash or stock dividend. The capital accounts have not changed since Vios began operations. If the maximum amount available for cash dividend is declared on December 31, 2019.
How much dividend is payable to the ordinary shareholders under each of the following scenarios?
1. Both preference shares is neither participating nor cumulative.
2. The 12% preference share is cumulative but nonparticipating.
3. The 12% preference share is cumulative and participating up to 15%.
4. The 12% preference share is cumulative and fully participating.