weet Company\'s outstanding stock consists of 1,400 shares of umulative 6% prefe

Question

weet Company's outstanding stock consists of 1,400 shares of umulative 6% preferred stock with a $100 par value and 11,400 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividend Declared year 1 3,400 year 2 7,400 year 3$39,000 The amount of dividends paid to preferred and common shareholders in year 3 is: Multiple Choice $39.000 preferred; $0 common. $14,400 preferred; $24,600 common. $0 preferred; $39,000 common

Explanation / Answer

Year Dividend Pref Dividend Cum. Total Common Stock paid Committed Arrears in Pref. dividend Pref Div paid Dividend paid 1 3400 8,400 5000 3400 0 2 7400 8,400 6000 7400 0 3 39000 8,400 -6000 14400 24600 Answer is $ 14400 Preferred and $ 24600 Common

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