Prepare a worksheet showing the maximum amount available

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Reference no: EM133927391

Problem

Dividends Otter Tail, Inc., began operations in January Year 1 and had the following reported net income or loss for each of its 5 years of operations: Year 1 $ 150,000 loss Year 2 130,000 loss Year 3 120,000 loss Year 4 250,000 income Year 5 1,000,000 income At December 31, Year 5, Otter Tail's capital stock was comprised of the following: Common stock, $10 par (100,000 shares authorized; 50,000 shares issued and outstanding) $500,000 Preferred stock, 4% noncumulative and nonparticipating, $100 par (1,000 shares authorized, issued, and outstanding) 100,000 Preferred stock, 8% cumulative and fully participating, $100 par (10,000 shares authorized, issued, and outstanding) 1,000,000 Otter Tail has never paid a cash or stock dividend. There has been no change in the capital accounts since Otter Tail began operations. The appropriate state law permits dividends only from retained earnings. Get the instant assignment help. Prepare a worksheet showing the maximum amount available for cash dividends on December 31, Year 5.

Reference no: EM133927391

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