Shawl co. has $10 par value, 10% cumulative preffered stock. There are 10,000 sh

Question

Shawl co. has $10 par value, 10% cumulative preffered stock. There are 10,000 shares issued and outstanding of the preffered stock. The company also has 100,000 shares of $1 par value common stock. No dividends had been paid in the years 2003, 2004, 2005, and 2006. In 2007, the company paid $35,000 in dividends. In 2008, the company paid $65,000 in dividends. Determine the allocation of dividends between preferred and common stockholders for 2007 and 2008.

Year

Preferred stock

Common stock

2007

2008

Totals

Year

Preferred stock

Common stock

2007

2008

Totals

Explanation / Answer

Year Preferred stock Common stock 2007 17500 17500 2008 32500 32500 Totals 50000 50000

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