Question

The shareholders’ equity of Tru Corporation includes $690,000 of $1 par common stock and $1,290,000 par of 7% cumulative preferred stock. The board of directors of Tru declared cash dividends of $159,000 in 2018 after paying $69,000 cash dividends in each of 2017 and 2016.

Required:
What is the amount of dividends common shareholders will receive in 2018?

Answer 1

Amount to be paid to common shareholders is $26,100

Working

	Preferred stock	Dividend rate	Preferred dividend
Annual Preferred Dividend:	$ 1,290,000.00	7.00%	$         90,300.000
	Total Cash dividend Paid	Paid to Preferred	Paid to common	Dividends in arrears at year-end
2016	$       69,000.00	$       69,000.00	$ 0	$ 21,300
2017	$       69,000.00	$       69,000.00	$ 0	$ 42,600
2018	$     159,000.00	$     132,900.00	$ 26,100