Cypress Corporation's outstanding stock is 75 shares of $55-par, 7% non-cumulative preferred stock and 2,100 shares of $12-par common stock. Cypress paid $2,500 in dividends during the year. Common stockholders received:

Question

Quizplus · Accepted Answer

First, we need to calculate the amount of dividends paid to the preferred stockholders: 
75 shares x $55-par value x 7% dividend rate = $288.75

This amount is the maximum that can be paid to preferred stockholders, and any remaining dividends will be paid to common stockholders.

Subtracting the amount paid to preferred stockholders from the total dividends paid: 
$2,500 - $288.75 = $2,211.25

This is the amount paid to common stockholders. Therefore, the answer is B.

Cypress Corporation's Outstanding Stock Is 75 Shares of $55-Par, 7