Xtreme Sports has $100,000 of 8% noncumulative,nonparticipating,preferred stock outstanding.Xtreme Sports also has $500,000 of common stock outstanding.In the company's first year of operation,no dividends were paid.During the second year,Xtreme Sports paid cash dividends of $30,000.This dividend should be distributed as follows:

Question

Quizplus · Accepted Answer

Preferred stock dividend: $100,000 * 8% = $8,000;
Common stock dividend: $30,000 - $8,000 = $22,000

Xtreme Sports Has $100,000 of 8% Noncumulative,nonparticipating,preferred Stock Outstanding