During 2016,total dividends declared by Par Corporation amounted to $29,000.There were 5,000 shares of $2 noncumulative preferred shares outstanding and 10,000 common shares outstanding.No dividends were declared in 2014 or 2015.The total amount of dividends payable to each class of shares in 2016 amounted to:

Question

Quizplus · Accepted Answer

Since the preferred shares are noncumulative and no dividends were declared in 2014 or 2015, the preferred shareholders are entitled to their dividend for 2016 only. Each preferred share is entitled to $2 (5,000 shares * $2 = $10,000). The remaining $19,000 ($29,000 total dividends - $10,000 for preferred) is payable to the common shareholders.

During 2016,total Dividends Declared by Par Corporation Amounted to $29,000