45.A company has the following paid-in capital: | $500,000 Preferred stock, 6%,

Question

45.A company has the following paid-in capital: | $500,000 Preferred stock, 6%, $5 par value, 100,000 shares authorized, 20,000 shares issued and outstanding Common stock, $9 par value, 300,000 shares $990,000 authorized, 110,000 shares issued and outstanding a) If the company pays a $15,000 dividend and the preferred stock is noncumulative, what is the amount the common stockholders will receive? b) If the company pays a $35,000 dividend, and the preferred stock is cumulative and two years' dividends are in arrears, what is the amount the common stockholders will receive?

Explanation / Answer

a) Preferred dividend = (20000*5*6%) = 6000

Common dividend = (15000-6000) = 9000

b) Preferred dividend = (20000*5*6%*3) = 18000

Common dividend = (35000-18000) = 17000

Related Questions

Navigate

• Browse (All)
• Browse 4
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.