Answered

Weaver Corporation had the following stock issued and outstanding on January 1, Year 2:

1. 102,000 shares of \[tex]$11 par common stock.
2. 27,000 shares of \$[/tex]120 par, 6 percent, noncumulative preferred stock.

On June 10, Weaver Corporation declared the annual cash dividend on its 27,000 shares of preferred stock and a \$1 per share dividend for the common shareholders. The dividends will be paid on July 1 to the shareholders of record on June 20.

Required: Determine the total amount of dividends to be paid to the preferred shareholders and common shareholders.

[tex]\[
\begin{tabular}{|l|l|}
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Preferred stock & \\
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Common stock & \\
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Total dividends & \\
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\end{tabular}
\][/tex]



Answer :

GinnyAnswer
To determine the total dividends to be paid to the preferred shareholders and common shareholders, we need to follow these steps:

### Step-by-Step Solution

#### Step 1: Calculate the total dividend for the preferred shareholders

Given:
- Number of preferred shares: 27,000 shares
- Par value of preferred shares: [tex]$120 - Dividend rate for preferred shares: 6% First, we calculate the dividend per preferred share: \[ \text{Dividend per preferred share} = \text{Par value} \times \text{Dividend rate} \] \[ \text{Dividend per preferred share} = 120 \times 0.06 = 7.2 \] Next, we calculate the total dividend for all preferred shares: \[ \text{Total dividend for preferred shareholders} = \text{Number of preferred shares} \times \text{Dividend per preferred share} \] \[ \text{Total dividend for preferred shareholders} = 27,000 \times 7.2 = 194,400 \] #### Step 2: Calculate the total dividend for the common shareholders Given: - Number of common shares: 102,000 shares - Dividend per common share: $[/tex]1

We calculate the total dividend for common shareholders:
[tex]\[ \text{Total dividend for common shareholders} = \text{Number of common shares} \times \text{Dividend per common share} \][/tex]
[tex]\[ \text{Total dividend for common shareholders} = 102,000 \times 1 = 102,000 \][/tex]

#### Step 3: Calculate the total dividend

We sum the total dividends for both preferred and common shareholders:
[tex]\[ \text{Total dividend} = \text{Total dividend for preferred shareholders} + \text{Total dividend for common shareholders} \][/tex]
[tex]\[ \text{Total dividend} = 194,400 + 102,000 = 296,400 \][/tex]

### Final Answer

| | |
|-----------------------|------------------|
| Preferred stock | [tex]$194,400.00 | | Common stock | $[/tex]102,000.00 |
| Total dividends | $296,400.00 |