A corporation had the following stock outstanding when the company's board of directors declared a $55,000 cash dividend during the current year:
$$\begin{array} { | l | l | }
\hline \text { Preferred stock, } \$ 10 \text { par, } 4 \% , 50,000 \text { shares issued } & \$ 500,000 \
\hline \text { Common stock, } \$ 1 \text { par, } 750,000 \text { shares issued } & 750,000 \
\hline \text { Total }& \$1,250,000\
\hline
\end{array}$$
Allocate the cash dividend between the preferred and common stockholders assuming the preferred stock is cumulative and nonparticipating and dividends are one year in arrears.

Question

A corporation had the following stock outstanding when the company's board of directors declared a $55,000 cash dividend during the current year:
 $$\begin{array} { | l | l | } 
\hline \text { Preferred stock, } \$ 10 \text { par, } 4 \% , 50,000 \text { shares issued } & \$ 500,000 \
\hline \text { Common stock, } \$ 1 \text { par, } 750,000 \text { shares issued } & 750,000 \
\hline \text { Total }& \$1,250,000\
\hline
\end{array}$$ 
Allocate the cash dividend between the preferred and common stockholders assuming the preferred stock is cumulative and nonparticipating and dividends are one year in arrears.

Quizplus · Accepted Answer

The Answer of A corporation had the following stock outstanding when the company's board of directors declared a $55,000 cash dividend during the current year:
 $$\begin{array} { | l | l | } 
\hline \text { Preferred stock, } \$ 10 \text { par, } 4 \% , 50,000 \text { shares issued } & \$ 500,000 \
\hline \text { Common stock, } \$ 1 \text { par, } 750,000 \text { shares issued } & 750,000 \
\hline \text { Total }& \$1,250,000\
\hline
\end{array}$$ 
Allocate the cash dividend between the preferred and common stockholders assuming the preferred stock is cumulative and nonparticipating and dividends are one year in arrears.

A Corporation Had the Following Stock Outstanding When the Company's