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Waterway Industries, has 16500 shares of 4%, $100 par value, cumulative preferred stock and 62000 shares...

Waterway Industries, has 16500 shares of 4%, $100 par value, cumulative preferred stock and 62000 shares of $1 par value common stock outstanding at December 31, 2018. There were no dividends declared in 2016. The board of directors declares and pays a $113000 dividend in 2017 and in 2018. What is the amount of dividends received by the common stockholders in 2018?

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Annual preferred dividend = 16500 *$100 * 4% = $66,000

Dividend due to preferred dividend in 2017 = Arrears of 2016 + Dividend of 2017 = $66,000 + $66,000 = $132,000

Dividend Paid in 2017 = $113,000

Arrears of dividend at the end of 2017 (Preferred) = $132,000 - $113,000 = $19,000

Now,

Dividend paid to preferred in 2018 = 2018 dividend + Arrears = 66,000 + $19,000 =  $85,000

Dividend paid to Common stockholders in 2018 = Total dividend - Dividend paid to preferred in 2018 = $113,000 - $85,000

= $28,000

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