Aim, Inc.has 10,000 shares of 4%, $100 par value, noncumulative preferred stock and 40,000 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 $120,000 dividend in 2021.What is the amount of dividends received by the common stockholders in 2021?

Question

Quizplus · Accepted Answer

First, calculate the dividends for preferred stock: 10,000 shares * $100 par value * 4% = $40,000. Since the total dividend is $120,000, subtract the preferred dividends from the total to find the common dividends: $120,000 - $40,000 = $80,000.

Aim, IncHas 10,000 Shares of 4%, $100 Par Value, Noncumulative Preferred