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Outstanding stock of the Kingbird Corporation included 49000 shares of $5 par common stock and 17500...

Outstanding stock of the Kingbird Corporation included 49000 shares of $5 par common stock and 17500 shares of 5%, $10 par non-cumulative preferred stock. In 2019, Kingbird declared and paid dividends of $4900. In 2020, Kingbird declared and paid dividends of $24500. How much of the 2020 dividend was distributed to preferred shareholders?

A.$13650.

B.$26250.

C.$8750.

D.None of these answer choices are correct.

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Answer #1

Answer is D. None of these answer choices are correct.

Calculations:

2019
Preferred Dividend payable (17,500 x $10) x 5% $8,750
Dividends paid ($4,900)
Arrears in preferred dividend $3,850
2020
Preferred Dividend payable (17,500 x $10) x 5% $8,750
Arrears in preferred dividend $3,850
Dividend distributed to preferred shareholders $12,600

From dividends declared and paid amount of $24,500, Dividend distributed to preferred shareholders are $12,600 and remaining paid to the common shares holders.

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