Chapter 6
Corporations: Contributed Capital and Dividends
298
AP-10B (
5
)
Tilda Inc. was formed on January 1, 2015. Its shares were all issued during the first year of
operations and were issued as follows: 10,000 common shares; 7,000, $4 cumulative preferred
shares; and 4,000, $3 non-cumulative preferred shares. Over the past four years Tilda Inc. has
declared and paid the following cash dividends.
Year
Total
2015
$60,000
2016
0
2017
100,000
2018
70,000
Calculate the amount of dividends paid to each class of shareholders for each year.
Class of Shares
# of shares
2015
2016
2016
2017
$4 Preferred—cumulative
7,000
$3 Preferred—non-cumulative
4,000
Common
10,000
Total dividends paid
$60,000
$0
$100,000
$70,000
AP-11B (
3
5
)
Given below is the equity section of Hudson Corporation at December 31, 2016.
Hudson Corporation
Shareholders' Equity
As at December 31, 2016
Share Capital
Preferred Shares, $12, non-cumulative, 100,000 authorized,
8,000 issued and outstanding
$800,000
Preferred Shares, $9, cumulative, 100,000 authorized,
20,000 issued and outstanding
2,000,000
Common Shares, unlimited authorized, 40,000 issued and outstanding 2,000,000
Total Share Capital
$4,800,000
Assume that no dividends were paid in 2014 or 2015. On December 31, 2016, Hudson
Corporation declared a total cash dividend of $736,000.
Required
a) Calculate the amount of cash dividend paid to each of the three classes of share capital.
