Fargo Company's outstanding stock consists of 400 shares of noncumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value.During the first three years of operation,the corporation declared and paid the following total cash dividends.
-The amount of dividends paid to preferred and common shareholders in year 1 is:

Question

Fargo Company's outstanding stock consists of 400 shares of noncumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value.During the first three years of operation,the corporation declared and paid the following total cash dividends. 
-The amount of dividends paid to preferred and common shareholders in year 1 is:

Quizplus · Accepted Answer

Preferred shareholders receive a fixed dividend of $100 per share, and there are 200 preferred shares outstanding. So, the total dividends paid to preferred shareholders in year 1 is $200 * 100 = $20,000. Common shareholders receive a dividend of $1 per share, and there are 19,800 common shares outstanding. So, the total dividends paid to common shareholders in year 1 is $1 * 19,800 = $19,800.

Fargo Company's Outstanding Stock Consists of 400 Shares of Noncumulative