Durden Co. has $10 par value, 12% cumulative preferred stock. There are 10,000 s

Question

Durden Co. has $10 par value, 12% cumulative preferred stock. There are 10,000 shares issued and outstanding of the preferred stock. The company also has 100,000 shares $1 par value common stock. No dividends has been paid in the years 2003,2004,2005, and 2006. In 2007, the company paid $35,000 in dividends. In 2008, the company paid $65,000 in dividends. Determine the allocation of dividends between preferred and common stockholders for 2007 and 2008.

Year

Preffered stock

Common stock

2007

2008

Totals

  

Year

     

Preffered stock

     

Common stock

     

2007

     

     

     

2008

     

     

     

Totals

     

     

  

Explanation / Answer

2007: $4,500 preferred dividends $40,500 common Total: $45,000
2008: $5,500 preferred dividends $49,500 common Total: $55,000   

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