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, $30,000; 2007, $0; 2008, $65,000; 2009, $30,000; 2010, $15,000. The amount of dividends received by the common stockholders during 2009 was

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The preferred stock is cumulative, meaning that any unpaid dividends will accumulate and must be paid before any dividends can be paid to common stockholders. In this case, preferred stockholders were paid a total of $75,000 ($30,000 in 2006 and $45,000 in 2008), leaving $15,000 available for common stockholders. In 2009, $30,000 in dividends were paid (all to preferred stockholders), so there were no dividends left for common stockholders. Therefore, the amount of dividends received by the common stockholders during 2009 was $0.

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