The following information is provided for Slickers, Inc. for year 2016: • 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 2014 and 2015
• Total dividends declared and paid during 2016 totaled $25,000
How much of the dividend was paid to the preferred stockholders during 2016 assuming the preferred stock is noncumulative?
A)$3,500.
B)$7,000.
C)$10,500.
D)$14,500.

Question

Quizplus · Accepted Answer

Preferred stock is noncumulative, so dividends in arrears are not paid in the current year. The preferred stock dividend is 7% of $50 par value, or $3.50 per share. With 1,000 shares outstanding, the total preferred stock dividend is $3,500.

The Following Information Is Provided for Slickers, Inc