Sweet Company’s outstanding stock consists of 1,700 shares of cumulative 5% preferred stock with a $100 par value and 10,700 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividends Declared & Paid Year 1 $ 2,700 Year 2 $ 6,700 Year 3 $ 35,500 The total amount of dividends paid to preferred and common shareholders over the three-year period is: Multiple Choice $8,500 preferred; $36,400 common. $15,200 preferred; $29,700 common. $25,500 preferred; $19,400 common. $19,700 preferred; $25,200 common. $17,000 preferred; $27,900 common.
Sweet Company’s outstanding stock consists of 1,700 shares of cumulative 5% preferred stock with a $100 par value and 10,700 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.
| Dividends Declared & Paid | |
|---|---|
| Year 1 | $ 2,700 |
| Year 2 | $ 6,700 |
| Year 3 | $ 35,500 |
The total amount of dividends paid to preferred and common shareholders over the three-year period is:
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$8,500 preferred; $36,400 common.
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$15,200 preferred; $29,700 common.
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$25,500 preferred; $19,400 common.
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$19,700 preferred; $25,200 common.
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$17,000 preferred; $27,900 common.
The dividend is declared out of the retained earnings.
The preference shareholders will received dividend prior to the common shareholders.
Any arrears of preference shareholders dividend is cleared before payment of dividend to common shareholders.
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