Question

Sweet Company's outstanding stock consists of 1,600 shares of noncumulative 4% prete stock with a $100 par value and 10,600 shares of common stock with a st0o par value During the first three years of operation, the corporation declared and paid the following total cash dividends. year 1 year 2 year 3 2,600 s 7,200 $35,000 The total amount of dividends paid to preferred and common sharehoiders over the three- year period is: Que Multiple Choice 14A. Ma to be 4 14B. On $19,200 preferred; $25,600 common for simila at a rate $13,600 preferred: $31.200 common Exper $15.400 preferred: $29 400 common $12.800

Answer 1

SOLUTION

22

Correct option is Option A, $19,200 preferred dividend, $25,600 common.

Preferred dividend = $100*4%*1,600 shares = $6,400

Years	Dividend declared ($)	Preferred dividend (Paid) ($)	Preferred dividend (Outstanding) ($)	Common stock ($)
Year 1	2,600	2,600	3,800	0
Year 2	7,200	7,200	3,000	0
Year 3	35,000	9,400	0	25,600
Total		19,200	0	25,600