Question

Question 4 View Policies Current Attempt in Progress Outstanding stock of the Splish Corporation included 52000 shares of $5 par common stock and 19000 shares of 5%, $10 par non-cumulative preferred stock. In 2019, Splish declared and paid dividends of $5200. In 2020, Splish declared and paid dividends of $26000. How much of the 2020 dividend was distributed to preferred shareholders? $14700 $28500. $9500 None of these answer choices are correct.

Answer 1

Correct answer----------$9500

Working

Correct amount of dividend paid to preferred stockholders will be $9500. They will not receive arrear dividend of 2019 since preferred stock are non cumulative. Once a dividend is lapsed on non cumulative preferred stock it is not paid in next year in arrear.

	Par Value per Preferred share	Dividend rate	Dividend per preffred share	Number of preffered shares	Preffered Dividend
Annual Prefrred Dividend:	10	5.00%	$            0.500	19000	$         9,500.00
	Total Cash dividend Paid	Paid to Preferred	Paid to common	Dividends in arear at year-end
2019	$ 5,200	$ 5,200	$ 0
2020	$ 26,000	$ 9,500	$ 16,500	$ 0