Wininger Corporation has 1000 shares of 6%,$50 par value,cumulative preferred stock and 25,000 shares of $1 par value common stock outstanding on December 31,2019 and December 31,2020.The board of directors declared and paid a $2,000 dividend in 2019.In 2020,$23,000 of dividends are declared and paid.What are the dividends received by the common stockholders in 2020 (there were no dividends in arrears prior to 2019)?

Question

Quizplus · Accepted Answer

1000 × $50 × 6% = $3000 Preferred Dividend per year
For 2019:
$3000 - Amount paid $2,000 = $1000 to be paid to preferred in 2020 (in arrears).
For 2020: $23,000 amount paid -$3000 preferred dividend for current year- $1000 preferred dividend in arrears from 2019 = $19,000 to common stockholders in 2020

Wininger Corporation Has 1000 Shares of 6%,$50 Par Value,cumulative Preferred