Outstanding stock of the Core Corporation included 20000 shares of $5 par common

Question

Outstanding stock of the Core Corporation included 20000 shares of $5 par common stock and 10000 shares of 690, $10 par noncumulative preferred stock. In 2016, Core declared and paid dividends of $4000. In 2017, Core declared and paid dividends of $12000. How much of the 2017 dividend was distributed to preferred shareholders? $8000 $4000 $6000 None of these answer choices are correct Marion, Inc. has 5000 shares of 590, $100 par value, noncumulative preferred stock and 20000 shares of $1 par value common stock outstanding at December 31, 2017. There were no dividends declared in 2016. The board of directors declares and pays a $65000 dividend in 2017. What is the amount of dividends received by the common stockholders in 2017? $0 $40000 $65000 The cumulative effect of the declaration and payment of a cash dividend on a company's balance sheet is to increase current liabilies and stockholders' equity decrease stockholders' equity and total assets. decrease current liabilities and stockholders' equity. increase total assets and stockholders' equity. 0

Explanation / Answer

1) Dividend paid to preferred stockholder on 2017 = 10000*10*6% = 6000

So answer is c) $6000

2) Dividend paid to Common Stockholders on 2017 = Total dividend-Dividend paid to preferred stockholders

                                                                           = 65000-(5000*100*5%)

Dividend paid to Common Stockholders on 2017 = 40000

So answer is b) $40000

3) The cumulative effect of the declaration and payment of a cash dividend on a company's balance sheet is to decrease stockholders equity and total assets

So answer is b) Decrease stockholder's equity and total assets

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