Concord Corporation\'s December 31, 2018 balance sheet showed the following: 9%

Question

Concord Corporation's December 31, 2018 balance sheet showed the following: 9% preferred stock, $20 par value, cumulative, 11000 shares authorized; 8500 shares issued Common stock, $10 par value, 900000 shares authorized; 875000 shares issued, 860000 shares outstanding Paid-in capital in excess of par-preferred stock Paid-in capital in excess of par-common stock Retained earnings Treasury stock (15000 shares) $170000 8750000 31500 13500000 3700000 330000 Concord declared and paid a $58600 cash dividend on December 15, 2018. If the company's dividends in arrears prior to that date were $10000, Concord's common stockholders received $48600. $33300 $19300 no dividend

Explanation / Answer

Answer:

Dividend Declared = $58,600
Dividend in Arrear on the date of declaration = $10,000

The Dividend to Preferred Stockholder will be paid in priority to Common Stockholder holder. Therefore, Preferred Dividend and Dividend in arrear will be paid out of Dividend declared, and if any amount remaining will be paid to Common Stockholders.

Preferred Dividend = $170,000 * 9%
Preferred Dividend = $15,300

Amount of Dividend paid to Common Stockholders = $58,600 - $10,000 - $15,300
Amount of Dividend paid to Common Stockholders = $33,300

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