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, 2015. There were no dividends declared in 2014. The board of directors declares and pays a $120,000 dividend in 2015. What is the amount of dividends received by the common stockholders in 2015?

Question

Quizplus · Accepted Answer

The preferred stockholders receive 4% of $100 par value on 10,000 shares, which is $40,000. Since the preferred stock is noncumulative, they do not receive dividends for 2014. The remaining $80,000 of the $120,000 total dividend goes to the common stockholders.

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