Marion, Inc. has 5,000 shares of 5%, $100 par value, noncumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2018. There were no dividends declared in 2017. The board of directors declares and pays a $65,000 dividend in 2015. What is the amount of dividends received by the common stockholders in 2015?

Question

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The preferred stockholders receive 5% of $100 par value per share, which is $5 per share. With 5,000 shares, they receive $25,000. The remaining $40,000 of the $65,000 total dividend goes to the common stockholders.