Cullen Distribution Corporation's contributed capital section of its balance sheet follows:
$\begin{array}{lrr}
\text { Preferredstock: \$10 par, 4\% } &\$650,000\
\text { Common stock: $ \$ 8 $ par } &400,000\
\end{array}$

During the last two years, Cullen Distribution Corporation did not declare any dividends to its shareholders. This year, Cullen declares and pays total dividends of $100,000. Calculate separately the dividends paid to preferred and common shareholders if the preferred stock is cumulative.

Question

Cullen Distribution Corporation's contributed capital section of its balance sheet follows:
 $\begin{array}{lrr}
  \text { Preferredstock: \$10 par, 4\% } &\$650,000\
 \text {  Common stock: $ \$ 8 $ par } &400,000\
\end{array}$

During the last two years, Cullen Distribution Corporation did not declare any dividends to its shareholders. This year, Cullen declares and pays total dividends of $100,000. Calculate separately the dividends paid to preferred and common shareholders if the preferred stock is cumulative.

Quizplus · Accepted Answer

The Answer of Cullen Distribution Corporation's contributed capital section of its balance sheet follows:
 $\begin{array}{lrr}
  \text { Preferredstock: \$10 par, 4\% } &\$650,000\
 \text {  Common stock: $ \$ 8 $ par } &400,000\
\end{array}$

During the last two years, Cullen Distribution Corporation did not declare any dividends to its shareholders. This year, Cullen declares and pays total dividends of $100,000. Calculate separately the dividends paid to preferred and common shareholders if the preferred stock is cumulative.