Aim, Inc., has 10,000 shares of 4%, $100 par value, noncumulative preferred stock and 40,000 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 $120,000 dividend in 2018. What is the amount of dividends received by the common stockholders in 2018?

Question

Quizplus · Accepted Answer

The preferred stockholders receive $40,000 (10,000 shares x $100 par x 4%). The remaining $80,000 ($120,000 total dividend - $40,000 preferred dividend) is distributed to the common stockholders.

Aim, Inc, Has 10,000 Shares of 4%, $100 Par Value, Noncumulative