Vega Corporation's December 31, 2015 balance sheet showed the following: Vega declared and paid a $58,000 cash dividend on December 15, 2015. If the company's dividends in arrears prior to that date were $10,000, Vega's common stockholders received

Question

Vega Corporation's December 31, 2015 balance sheet showed the following:  Vega declared and paid a $58,000 cash dividend on December 15, 2015. If the company's dividends in arrears prior to that date were $10,000, Vega's common stockholders received

Quizplus · Accepted Answer

Dividends in arrears means that the company has not paid the full amount of dividends in the past. Therefore, the amount of dividend that the common stockholders will receive is the total amount of dividend declared minus the dividend in arrears.

Dividend declared on December 15, 2015 = $58,000
Dividends in arrears prior to December 15, 2015 = $10,000

Total dividend due to common stockholders = $58,000 - $10,000 = $48,000

Therefore, the common stockholders will receive a dividend of $48,000. The answer is C.

Vega Corporation's December 31, 2015 Balance Sheet Showed the Following