Manner, Inc.has 5,000 shares of 5%, ₤100 par value, noncumulative preference shares and 20,000 ordinary shares with a ₤1 par value outstanding at December 31, 2011.There were no dividends declared in 2010.The board of directors declares and pays a ₤45,000 dividend in 2011.What is the amount of dividends received by the ordinary shareholders in 2011?

Question

Quizplus · Accepted Answer

The preference shareholders receive ₤25,000 (5,000 shares x ₤100 x 5%). The remaining ₤20,000 (₤45,000 - ₤25,000) is distributed to the ordinary shareholders.