Outstanding stock of the West Corporation included 40000 shares of $5 par common stock and 10000 shares of 5% $10 par non-cumulative preferred stock.In 2021 West declared and paid dividends of $4000.In 2021 West declared and paid dividends of $20000.How much of the 2022 dividend was distributed to preferred shareholders?

Question

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In 2022, the preferred shareholders receive 5% of $10 par value on 10,000 shares, which equals $5,000. Since the preferred stock is non-cumulative, they do not receive any unpaid dividends from previous years.

Outstanding Stock of the West Corporation Included 40000 Shares of $5