Mann Co. has outstanding 80,000 shares of 8% preferred stock with a $10 par value and 150,000 shares of $3 par value common stock. Dividends have been paid every year except last year and the current year. If the preferred stock is cumulative and nonparticipating and $400,000 is distributed, the common stockholders will receive

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The preferred stockholders are owed dividends for two years (last year and the current year) at 8% of $10 par value, which is $0.80 per share. For 80,000 shares, this amounts to $64,000 per year, totaling $128,000 for two years. The remaining $272,000 ($400,000 - $128,000) is distributed to the common stockholders.

Mann Co Has Outstanding 80,000 Shares of 8% Preferred Stock with with a $10