Lakeland, Inc.has 25,000 shares of 6%, $100 par value, noncumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2021.There were no dividends declared in 2020.The board of directors declares and pays a $250,000 dividend in 2021.What is the amount of dividends received by the common stockholders in 2021?

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Quizplus · Accepted Answer

First, calculate the dividends for the preferred stock: 25,000 shares * $100 par value * 6% = $150,000. Since the total dividend is $250,000, subtract the preferred dividends from the total to find the common dividends: $250,000 - $150,000 = $100,000.