Beckham Corporation has 3,000 shares of $100 par value,7 percent cumulative preferred stock,and 10,000 shares of $10 par value common stock outstanding during its first five years of operation.Beckham Corporation paid cash dividends as follows: 2006,$14,000; 2007,$18,000; 2008,$65,000; 2009,$30,000; 2010,$15,000.The amount of dividends received by the preferred stockholders during 2010 was

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Since the preferred stock is cumulative, any unpaid dividend from the previous years must be paid before any dividend can be paid to the common stockholders. The total amount of unpaid dividend from 2006-2009 is $97,000 ($14,000 + $18,000 + $65,000 + $30,000). The total dividend preference for the preferred stockholders is $210,000 ($100 x 3,000 x 7%). Therefore, the preferred stockholders are entitled to receive $113,000 ($210,000 - $97,000) of dividend before any dividend can be paid to the common stockholders. Dividing this amount by the number of preferred shares gives a dividend preference of $37.67 per share ($113,000 ÷ 3,000). In 2010, only $15,000 of dividend was paid, which is equal to $5 per preferred share ($15,000 ÷ 3,000). Therefore, the preferred stockholders received a total dividend of $42.67 per share ($37.67 + $5) in 2010. Multiplying this by the number of preferred shares gives a total amount of $127,010 ($42.67 x 3,000), which is closest to answer choice B.

Beckham Corporation Has 3,000 Shares of $100 Par Value,7 Percent