The shareholders' equity of Green Corporation includes $200,000 of $1 par common stock and $400,000 par of 6% cumulative preferred stock. The board of directors of Green declared cash dividends of $50,000 in 2018 after paying $20,000 cash dividends in each of 2017 and 2016. What is the amount of dividends common shareholders will receive in 2018?
A) $18,000.
B) $26,000.
C) $28,000.
D) $32,000.

Question

Quizplus · Accepted Answer

Green's common shareholders will receive dividends of $18,000 as a result of the 2018 distribution 11ea937b_35ac_d0f0_a419_6b8899ec5197_TB2599_00 *$24,000 current preference (6% × $400,000), thus $4,000 dividends in arrears.
**$24,000 current preference (6% × $400,000), thus another $4,000 dividends in arrears.
***$8,000 dividends in arrears plus the $24,000 current preference.

The Shareholders' Equity of Green Corporation Includes $200,000 of $1