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Sunland Inc., has 1200 shares of 6%, $50 par value, cumulative preferred stock and 49492 shares of $1 par value common stock outstanding at December 31, 2019, and December 31, 2020. The board of directors declared and paid a $2400 dividend in 2019. In 2020, $11100 of dividends are declared and paid. What are the dividends received by the common stockholders in 2020? $6300 O $3900 O $3600 O $6000

Sunland Inc., has 1200 shares of 6%, $50 par value, cumulative preferred stock and 49492 shares of $1 par value common stock outstanding at December 31, 2019, and December 31, 2020. The board of directors declared and paid a $2400 dividend in 2019. In 2020, $11100 of dividends are declared and paid. What are the dividends received by the common stockholders in 2020? $6300 O $3900 O $3600 O $6000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Sunland Inc., has 1200 shares of 6%, $50 par value, cumulative preferred stock and 49492 shares of $1 par value common stock outstanding at December 31, 2019, and December 31, 2020. The board of directors declared and paid a $2400 dividend in 2019. In 2020, $11100 of dividends are declared and paid. What are the dividends received by the common stockholders in 2020? O $6300 O $3900 O $3600 O $6000
Transcribed Image Text:Sunland Inc., has 1200 shares of 6%, $50 par value, cumulative preferred stock and 49492 shares of $1 par value common stock outstanding at December 31, 2019, and December 31, 2020. The board of directors declared and paid a $2400 dividend in 2019. In 2020, $11100 of dividends are declared and paid. What are the dividends received by the common stockholders in 2020? O $6300 O $3900 O $3600 O $6000
Expert Solution
Step 1

Dividend means the amount given to shareholder of the company as profit distribution by company.

First , dividend is given to preference stock holder at specified percentage and then rest dividend is given to common stock holder.

If the preference share are cumulative , then unpaid dividend of last year will be given in next year and if the preference share are not cumulative , then unpaid dividend of last year will not be given in next years.

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