Cypress Corporation's outstanding stock is 75 shares of $60-par,8% non-cumulative preferred stock and 2,000 shares of $10-par common stock.Cypress paid $2,400 in dividends during the year.Common stockholders received:

Question

Quizplus · Accepted Answer

First, we need to calculate the annual dividend paid to preferred stockholders. 
75 shares of preferred stock X $60 par value X 8% dividend rate = $360 
Since the preferred stock is non-cumulative, any unpaid dividends from previous years do not accumulate. 
Therefore, the remaining $2,040 in dividends must have been paid to the common stockholders.

Cypress Corporation's Outstanding Stock Is 75 Shares of $60-Par,8% Non-Cumulative