Corporations: Dividends, Retained Earnings, and income Reporting

The financial information is available for Klinger Corporation

The weighted-average number of shares of common stock outstanding was 180,000 for 2019 and 150,000 for 2020.

Instruction

Calculate earnings per share and return on common stockholders' equity for 2020 and 2019.

Solution

At December 31, 2020, Millwood Corporation has 2,000 shares of $100 par value, 8%, preferred stock outstanding and 100,000 shares of $10 par value common stock issued. Millwood's net income for the year is $241,000.

Instruction

1. The dividend to preferred stockholders was declared. There has been no change in the number of shares of common stock outstanding during the year.
2. The dividend to preferred stock holders was not declared. The preferred stock is cumulative. Millwood held 10,000 shares of common treasury stock throughout the year.

Solution