Chapter 6
Corporations: Contributed Capital and Dividends
299
b) Calculate the dividend paid per share for each of the three classes of share capital.
c) Calculate the average issue price of each type of shares.
d) Prepare the journal entry for recording dividends in arrears for the last two years.
AP-12B
(
5
)
Tea Time Inc. is a distributor of fine artisan tea and has a June 30 year-end. Due to several years
of poor financial performance, dividends were last paid in 2013. On June 30, 2016 the company
declared $100,000 of dividends. The dividends will be paid on July 5, 2016. As at June 30, 2016,
the following shares were outstanding: 90,000 common shares; 40,000, $0.30 cumulative
preferred shares; and 35,000, $0.20 non-cumulative preferred shares.
Required
a) Calculate how much Tea Time Inc. owes in dividends to each of the shareholders as at June
30, 2016.
