$Name Sports has $90,000 of 6% noncumulative, nonparticipating, preferred stock

Question

$Name Sports has $90,000 of 6% noncumulative, nonparticipating, preferred stock outstanding. Prime Sports also has $45,000 of common stock outstanding. In the company's first year of operation, no dividends were paid. During the second year, Prime Sports paid cash dividends of $55,000. This dividend should be distributed as follows: -$11,000 preferred; $44,000 common. -$33,000 preferred; $22,000 common. -$0 preferred; $55,000 common. -$27,500 preferred; $27,500 common. -$5,400 preferred; $49,600 common.

Explanation / Answer

as 6% of 90000 = $5400 so for preffered stock dividends = $5400 also for common stock = $27500 so ans is : $27,500 common,$5,400 preferred

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