Question

/27353/assignments/2860124 module. Jtem d=10103604 My Library Thew. WiePLUS Home National $._. an H 11 Homework Send to Gradebook Question 7 View Policies Current Attempt in Progress Sunland Company has 10,000 shares of 8%, $100 par value,cumulative preferred stock outstanding at December 31, 2022. No dividends were declared in 2020 2021. Sunland wants to pay $395.000 of dividends in 2022, what amount of dividends will common stockholders receive? Dividends allocated to common stock 5 eTextbook and Media eTextbook Attempts: 0 of used Save forte WE delete

Answer 1

Before paying dividends to common stockholders', dividends must be paid to cumulative preferred stockholders' for the previous years and current year. Preferred shares Dividend for 1 year Dividends for 3 years for 2020, 2021 and 2022 $ $ $ 1,000,000 (10,000 shares * $ 100 par value) 80,000 ($ 1,000,000 * 8%) 240,000 ($ 80,000 * 3 years) Dividends allocated to common stockholders $ 155,000 ($ 395,000 - $ 240,000)