Blue Nose Cold Storage Company was incorporated two years ago on 1 January. Since then, the following shares have been issued: On 31 December this year, the company declared and paid a total of $50 000 in dividends. This was the first dividend declared by the firm. That is, until this date no dividends had been declared or paid during the first two years of operations. If the preference shares are cumulative, what is the most that will be available out of the $50 000 dividend for payment to the ordinary shareholders?

Question

Blue Nose Cold Storage Company was incorporated two years ago on 1 January. Since then, the following shares have been issued:  On 31 December this year, the company declared and paid a total of $50 000 in dividends. This was the first dividend declared by the firm. That is, until this date no dividends had been declared or paid during the first two years of operations. If the preference shares are cumulative, what is the most that will be available out of the $50 000 dividend for payment to the ordinary shareholders?

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The Answer of Blue Nose Cold Storage Company was incorporated two years ago on 1 January. Since then, the following shares have been issued:  On 31 December this year, the company declared and paid a total of $50 000 in dividends. This was the first dividend declared by the firm. That is, until this date no dividends had been declared or paid during the first two years of operations. If the preference shares are cumulative, what is the most that will be available out of the $50 000 dividend for payment to the ordinary shareholders?

Blue Nose Cold Storage Company Was Incorporated Two Years Ago