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, $14,500; 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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The preferred stockholders are entitled to receive a 7% dividend on their $300,000 par value of preferred stock, which amounts to $21,000. However, since the preferred dividends are cumulative, the preferred stockholders are entitled to receive the dividends that were not paid in previous years. In 2006, the preferred stockholders received $14,000 in dividends, which was less than the $21,000 they were entitled to receive. Therefore, the preferred stockholders are entitled to receive $7,000 in cumulative dividends in 2010. Adding the $7,000 in cumulative dividends to the $14,000 in regular dividends, the preferred stockholders received a total of $21,000 in dividends in 2010.

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