Burkert Company has 50,000 shares of $1 par value common stock issued and outstanding.The company also has 5000 shares of $100 par value,6% cumulative preferred stock outstanding.Burkert did not pay the preferred dividends in 2018 and 2019.For the common stockholders to receive a dividend in 2020,the board of directors must declare dividends in excess of:

Question

Quizplus · Accepted Answer

$100 × 0.06 × 5000 = $30,000 dividend per year promised to preferred stock.
$30,000 × 3 years = $90,000

Burkert Company Has 50,000 Shares of $1 Par Value Common