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

Question

Quizplus · Accepted Answer

The preferred shares are cumulative, meaning they are entitled to dividends for both 2015 and 2016. The annual dividend for preferred shares is 5,000 shares * $2 = $10,000. Since no dividends were paid in 2015, the preferred shareholders are owed $10,000 for 2015 and $10,000 for 2016, totaling $20,000. The remaining $9,000 of the total $29,000 declared dividends goes to the common shareholders.

During 2016,total Dividends Declared by Jackson Corp