Antiques.com Corporation's outstanding stock is 75 shares of $60,8% cumulative nonparticipating preferred stock and 2,000 shares of $10 par value common stock.Antiques paid $2,400 cash dividends during the year.Common stockholders received:

Question

Quizplus · Accepted Answer

The preferred stockholders are entitled to receive their dividend first, and since it is cumulative, any missed dividends from previous years must be paid before common stockholders receive any dividends. The preferred stock dividend is calculated as follows:

75 shares * $60 * 0.08 = $360

Since $360 of the $2,400 total dividend were paid to the preferred stockholders, the remaining $2,040 ($2,400 - $360) would be paid to the common stockholders. Therefore, the common stockholders received $2,040 in dividends.

AntiquesCom Corporation's Outstanding Stock Is 75 Shares of $60,8% Cumulative