Question

Sheffield Corporation’s December 31, 2018 balance sheet showed the following: 9% preferred stock, $20 par value, cumulative, 9000 shares authorized; 6500 shares issued $ 130000 Common stock, $10 par value, 1100000 shares authorized; 1075000 shares issued, 1060000 shares outstanding 10750000 Paid-in capital in excess of par―preferred stock 29000 Paid-in capital in excess of par―common stock 13610000 Retained earnings 3800000 Treasury stock (15000 shares) 327000 Sheffield declared and paid a $57100 cash dividend on December 15, 2018. If the company’s dividends in arrears prior to that date were $10100, Sheffield’s common stockholders received________

Answer 1

Answer:

$35,300

Explanation:

For computing the common stock dividend, first we have to find out the yearly dividend which is shown below:

= Number of shares × par value per share × dividend rate

= 6,500 shares × $20 × 9%

= $11,700

The dividend in arrears would be $10,100

So, the common stockholder received would be

= Cash dividend - yearly dividend - dividend in arrears

= $57,100 - $11,700 - $10,100

= $35,300