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  • Retained Earnings Exercise 13

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    Honelyn Juaton
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    The document shows calculations for dividend distributions between preference and ordinary shareholders over 5 scenarios. In each scenario, the total share capital and dividend rates are provided. The calculations then determine the preference dividends, ordinary dividends, and any remaining amount to be distributed between the two classes of shares. The dividends per share for each class are reported at the bottom.

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    The document shows calculations for dividend distributions between preference and ordinary shareholders over 5 scenarios. In each scenario, the total share capital and dividend rates are provided. The calculations then determine the preference dividends, ordinary dividends, and any remaining amount to be distributed between the two classes of shares. The dividends per share for each class are reported at the bottom.

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    © All Rights Reserved
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    13 views3 pages

    Retained Earnings Exercise 13

    Uploaded by

    Honelyn Juaton
    The document shows calculations for dividend distributions between preference and ordinary shareholders over 5 scenarios. In each scenario, the total share capital and dividend rates are provided. The calculations then determine the preference dividends, ordinary dividends, and any remaining amount to be distributed between the two classes of shares. The dividends per share for each class are reported at the bottom.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 3

    1.

    )
    Preference Ordinary Total
    Outstanding Share Capital 3,000,000 9,000,000 11,000,000

    Current Preference Dividends


    (3,000,000 x 5%) 150,000 150,000
    Remainder to O/S:
    (3,000,000 – 150,000 = 2,850,000) 2,850,000 2,850,000
    Total 150,000 2,850,000 3,000,000

    Dividends per share 2.50 9.50

    2.)
    Preference Ordinary Total
    Outstanding Share Capital 3,000,000 9,000,000 11,000,000

    Preference Dividends in Arrears:


    (3,000,000 x 5% x 1 year) 150,000 150,000
    Current Preference Dividends
    (3,000,000 x 5%) 150,000 150,000
    Remainder to Ordinary:
    (3,000,000 – 150,000 – 150,000 =
    2,700,000 2,700,000
    2,700,000)
    Total 300,000 2,700,000 3,000,000

    Dividends per share 5.00 9.00

    3.)
    Preference Ordinary Total
    Outstanding Share Capital 3,000,000 9,000,000 11,000,000

    Current Preference Dividends


    (3,000,000 x 5%) 150,000 150,000
    Current Ordinary Dividends
    (9,000,000 x 5%) 450,000 450,000
    Remainder for Participation:
    (3,000,000 – 150,000 – 450,000 =
    2,400,000)
    Preference: 3/12 x 2,400,000 600,000 600,000
    Ordinary: 9/12 x 2,400,000 1,800,000 1,800,000
    Total 750,000 2,250,000 3,000,000

    Dividends per share 12.50 7.50

    4.)
    Preference Ordinary Total
    Outstanding Share Capital 3,000,000 9,000,000 11,000,000

    Current Preference Dividends


    (3,000,000 x 5%) 150,000 150,000
    Current Ordinary Dividends
    (9,000,000 x 5%) 450,000 450,000
    Remainder for Participation:
    (3,000,000 – 150,000 – 450,000 =
    2,400,000)
    Preference: 3/12 x 2,400,000 600,000 600,000
    Ordinary: 9/12 x 2,400,000 1,800,000 1,800,000
    Total 750,000 2,250,000 3,000,000

    Dividends per share 12.50 7.50

    5.)
    Preference Ordinary Total
    Outstanding Share Capital 3,000,000 9,000,000 11,000,000

    Preference Dividends in Arrears:


    (3,000,000 x 5% x 3 years) 450,000 450,000
    Current Preference Dividends
    (3,000,000 x 5%) 150,000 150,000
    Current Ordinary Dividends
    (9,000,000 x 5%) 450,000 450,000
    Remainder for Participation:
    (3,000,000 – 450,000 – 150,000 –
    450,000 = 1,950,000)
    Preference: 3/12 x 1,950,000 487,500 487,500
    Ordinary: 9/12 x 1,950,000 1,462,500 1,462,500
    Total 1,087,500 1,912,500 3,000,000

    Dividends per share 18.13 6.38

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