Sweet Company\'s outstanding stock consists of 1,800 shares of noncumultve 4% pr
ID: 2547242 • Letter: S
Question
Sweet Company's outstanding stock consists of 1,800 shares of noncumultve 4% preferred stock with a S 100 par value and 10,800 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 14 Declared 0/5 points awarded y year 1 2,800e year 2 7,60e year 3 $36,000 Scored The total amount of dividends paid to preferred and common shareholders over the three-year period is Multiple Choice $21,600 preferred, $24,800 common $14.800 preferred, $31600 common $7.200 preferred. $39 200 common Prex 14 of 40 Next> O Type here to search DOLLExplanation / Answer
Annual preference dividend
1800 shares of preferred stock *$100 Par value*4%
$7,200
Amount of dividend paid each year
Year
Dividend declared
preferred dividend
common stock dividend
1
$2,800
$2,800
0
2
$7,600
$7,200
$400
3
$36,000
$7,200
$28,800
$17,200
$29,200
Ans: $17200 preferred dividend and $29200 common stock dividend
Dividend declared should be first paid to preferred stock holders and then to common stock holders
Annual preference dividend
1800 shares of preferred stock *$100 Par value*4%
$7,200
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