Art Inc. has 2500 shares of 5% $100 par value cumulative preferred stock and 20000 shares of $1 par value common stock outstanding from December 31 2015 through Dec. 31 2017. There were no dividends declared in 2015. The board of directors declares and pays a $22500 dividend in 2016 and in 2017. What is the amount of dividends received by the common stockholders in 2017?

Question

Quizplus · Accepted Answer

In 2017, preferred stockholders receive $12,500 ($5 per share x 2500 shares) for 2017 and $12,500 for the 2015 arrears. The remaining $7,500 of the $22,500 dividend goes to common stockholders.

Art Inc Has 2500 Shares of 5% $100 Par Value Cumulative