Sweet Company’s outstanding stock consists of 1,600 shares of cumulative 4% preferred stock with a $100...

Sweet Company’s outstanding stock consists of 1,600 shares of cumulative 4% preferred stock with a $100 par value and 11,600 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividends Declared & Paid Year 1 $ 3,600 Year 2 $ 7,600 Year 3 $ 40,000

The amount of dividends paid to preferred and common shareholders in year 3 is:

Multiple Choice

$40,000 preferred; $0 common.

$19,200 preferred; $20,800 common.

$8,000 preferred; $32,000 common.

$0 preferred; $40,000 common.

Expert Solution

Ans: $8,000 preferred; $32,000 common.

In case of cumulative preferred stock, preferred dividend which remains unpaid in one year will get cumulated for payment in next years.
	Par value per Preferred Share	Dividend Rate	Dividend per Preferred Share	Number of Preferred Shares	Annual Preferred Dividend
Annual Preferred Dividend:	$ 100.00	4.0%	$ 4.00	1,600	$ 6,400
	Total Cash Dividend Paid	Annual Preferred Dividend Due	Annual Preferred Dividend paid	Arrears of Preferred Dividends paid during the Year	Total Preferred Dividends paid during the Year	Paid to Common	Dividends in Arrears at year end
	a	b	c	d	e = c+d	e= a - c	f
Year 1	$ 3,600	$ 6,400	$ 3,600	$ -	$ 3,600	$ -	$ 2,800
Year 2	$ 7,600	$ 6,400	$ 6,400	$ 1,200	$ 7,600	$ -	$ 1,600
Year 3	$ 40,000	$ 6,400	$ 6,400	$ 1,600	$ 8,000	$ 32,000	$ -
Totals	$ 51,200	$ 19,200	$ 16,400			$ 32,000

	Class of Stock			Year 3 Dividends
	Preferred			$ 8,000
	Common			$ 32,000
	Total			$ 40,000

Feel free to ask any clarification, if required. Kindly provide feedback by thumbs up, if satisfied. It will be highly appreciated.
Thank you.

ekkarill92 answered 1 year ago

Sweet Company’s outstanding stock consists of 1,600 shares of noncumulative 4% preferred stock with a $100...

Sweet Company’s outstanding stock consists of 1,600 shares of noncumulative 4% preferred stock with a $100 par value and 11,600 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividends Declared & Paid Year 1 $ 3,600 Year 2 $ 9,200 Year 3 $ 40,000 The total amount of dividends paid to preferred and common shareholders over the three-year period is: Multiple Choice...

Sweet Company’s outstanding stock consists of 2,000 shares of cumulative 4% preferred stock with a $100...

Sweet Company’s outstanding stock consists of 2,000 shares of cumulative 4% preferred stock with a $100 par value and 12,000 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividends Declared & Paid Year 1 $ 4,000 Year 2 $ 8,000 Year 3 $ 42,000 The total amount of dividends paid to preferred and common shareholders over the three-year period is: Multiple Choice...

1.Sweet Company’s outstanding stock consists of 2,000 shares of cumulative 4% preferred stock with a $100...

1.Sweet Company’s outstanding stock consists of 2,000 shares of cumulative 4% preferred stock with a $100 par value and 11,000 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividend Declared Year 1 $ 3,000 Year 2 $ 7,000 Year 3 $ 37,000 The total amount of dividends paid to preferred and common shareholders over the three-year period is: Multiple Choice A.$24,000 preferred;...

Sweet Company’s outstanding stock consists of 1,300 shares of cumulative 5% preferred stock with a $100...

Sweet Company’s outstanding stock consists of 1,300 shares of cumulative 5% preferred stock with a $100 par value and 10,300 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividends Declared & Paid Year 1 $ 2,300 Year 2 $ 6,300 Year 3 $ 33,500 The total amount of dividends paid to preferred and common shareholders over the three-year period is:

Sweet Company’s outstanding stock consists of 1,400 shares of cumulative 6% preferred stock with a $100...

Sweet Company’s outstanding stock consists of 1,400 shares of cumulative 6% preferred stock with a $100 par value and 10,400 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividend Declared year 1 $ 2,400 year 2 $ 6,400 year 3 $ 34,000 The amount of dividends paid to preferred and common shareholders in year 3 is: Multiple Choice a. $16,400 preferred; $17,600...

Sweet Company’s outstanding stock consists of 1,900 shares of cumulative 5% preferred stock with a $100...

Sweet Company’s outstanding stock consists of 1,900 shares of cumulative 5% preferred stock with a $100 par value and 10,900 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividends Declared & Paid Year 1 $ 2,900 Year 2 $ 6,900 Year 3 $ 36,500 The total amount of dividends paid to preferred and common shareholders over the three-year period is: Multiple Choice...

Sweet Company’s outstanding stock consists of 1,200 shares of noncumulative 4% preferred stock with a $100...

Sweet Company’s outstanding stock consists of 1,200 shares of noncumulative 4% preferred stock with a $100 par value and 10,200 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividend Declared year 1 $ 2,200 year 2 $ 6,400 year 3 $ 33,000 The total amount of dividends paid to preferred and common shareholders over the three-year period is: Multiple Choice $14,400 preferred;...

39. Sweet Company’s outstanding stock consists of 1,000 shares of cumulative 5% preferred stock with a...

39. Sweet Company’s outstanding stock consists of 1,000 shares of cumulative 5% preferred stock with a $100 par value and 10,000 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividends Declared & Paid Year 1 $ 2,000 Year 2 $ 6,000 Year 3 $ 32,000 The amount of dividends paid to preferred and common shareholders in year 3 is: $7,000 preferred; $25,000...

Coronado Industries, has 16000 shares of 4%, $100 par value, cumulative preferred stock and 61000 shares...

Coronado Industries, has 16000 shares of 4%, $100 par value, cumulative preferred stock and 61000 shares of $1 par value common stock outstanding at December 31, 2021. There were no dividends declared in 2019. The board of directors declares and pays a $108000 dividend in 2020 and in 2021. What is the amount of dividends received by the common stockholders in 2021? A $0 B $24000 C $108000 D $64000

Marigold Corp., has 14200 shares of 4%, $100 par value, cumulative preferred stock and 59900 shares...

Marigold Corp., has 14200 shares of 4%, $100 par value, cumulative preferred stock and 59900 shares of $1 par value common stock outstanding at December 31, 2018. There were no dividends declared in 2016. The board of directors declares and pays a $117000 dividend in 2017 and in 2018. What is the amount of dividends received by the common stockholders in 2018? 0 $117000 $63600 $56800

Question