Rendezvous Inc. has 10000 shares of 5% $100 par value noncumulative preferred stock and 20000 shares of $1 par value common stock outstanding at December 31 2017. There were no dividends declared in 2016. The board of directors declares and pays a $110000 dividend in 2017. What is the amount of dividends received by the common stockholders in 2017?

Question

Quizplus · Accepted Answer

First, calculate the dividends for preferred stock: 10000 shares * $100 par value * 5% = $50000. Since the total dividend is $110000, subtract the preferred dividends from the total to find the common dividends: $110000 - $50000 = $60000.