The following information is provided for Slickers,Inc.for year 2019: • Preferred stock,7%,$50 par value,1,000 shares issued and outstanding
• Common stock,$100 par value,2,000 shares issued and outstanding
• Dividends in arrears for 2017 and 2018
• Total dividends declared and paid during 2019 totaled $25,000
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How much of the dividend was paid to the preferred stockholders during 2019 assuming the preferred stock is noncumulative?
A)$3,500.
B)$7,000.
C)$10,500.
D)$14,500.

Question

Quizplus · Accepted Answer

Since the preferred stock is noncumulative, the dividends in arrears for 2017 and 2018 do not need to be paid. Therefore, the total dividend paid to the preferred stockholders in 2019 is simply 7% of the $50 par value per share multiplied by the 1,000 shares issued and outstanding, which equals $3,500.

The Following Information Is Provided for Slickers,Inc