QUESTION 23 The Christopher Corporation\'s March 31 stockholders\' equity consis

Question

QUESTION 23

The Christopher Corporation's March 31 stockholders' equity consisted of the following four items:

6%, cumulative preferred stock, $100 par, 30,000 shares issued $3,000,000 Common stock

$1 par, 2,000,000 shares issued $2,000,000

Additional paid-in capital, common stock $4,000,000

Retained earnings $3,000,000

All stock was issued seven years ago. Dividends were paid to preferred stock in all previous years except for two years. Total dividends declared and paid in the year ended March 31 were $1,000,000. Calculate the total dollar amount of dividends paid to preferred stockholders and common stockholders in the year ended March 31.

a. Preferred dividends = $180,000. Common dividends = $820,000.

b. Preferred dividends = $360,000. Common dividends = $640,000.

c. Preferred dividends = $540,000. Common dividends = $460,000.

d. Preferred dividends = $600,000. Common dividends = $400,000.

Explanation / Answer

Calculate the total dollar amount of dividends paid to preferred stockholders and common stockholders in the year ended March 31.

Total dividend = 1000000

Preferred dividend = 30000*100*6%*3 = 540000

Common dividend = 1000000-540000 = 460000

so answer is c) Preferred dividends = $540,000. Common dividends = $460,000.

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.