1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
zhannawk [14.2K]
3 years ago
6

Outstanding stock of the West Corporation included 40,000 shares of $5 par common stock and 10,000 shares of 5%, $10 par non-cum

ulative preferred stock. In year 1, West declared and paid dividends of $4,000. In year 2, West declared and paid dividends of $20,000. How much of the year 2 dividend was distributed to preferred shareholders?
Business
1 answer:
Assoli18 [71]3 years ago
3 0

Answer:

Dividend paid = (5%× 10,000 × $10) = $5000.

Explanation:

<em>Preference shares entitles the holders to  participate in a fixed dividend out of the profit made by the company. The divide is always a fixed percentage of the nominal value of the preference shares</em>

It can be cumulative and non-accumulate.

Cumulative <em>simply implies that should the company misses the payment of dividend in a particular year such unpaid dividend would be carried carried forward and paid in arrears in the following year/</em>

Non-cumulative i<em>s the exact opposite of the case . Here, unpaid dividends are not paid in arrears in fact such are forfeited for life.</em>

Dividend in Year 1

Dividend paid in Year 1 was $ 4000 but ought to be $5,000 (5%× 10,000 × $10). An arrear of $1000

Dividend in Year   2

Dividend paid = (5%× 10,000 × $10) = $5000.

Note that the unpaid dividend of $1,000 in year 1 is lost forever

You might be interested in
A father and his son are celebrating the father's 75th birthday. Drink for drink, who will most likely have a higher BAC ?
Temka [501]
The one who will most likely have a higher BAC is the father because a person who is older will most likely have the higher BAC, as the father is already seventy five and much older to his son, he will be therefore have a higher BAC compared to his son.
4 0
3 years ago
Read 2 more answers
Imagine that you earned $8,425 in one year. If the government enforces a 15% income tax, how much money would you owe in taxes a
AleksandrR [38]
$7165.25 hope this help =]
3 0
2 years ago
Read 2 more answers
If you must apply for a loan, you should?
Agata [3.3K]
First have good credit.
7 0
3 years ago
Why do people establish their own business?​
blagie [28]

Answer:

financial freedom

Explanation:

the reasons people start their own business is usually because they desire financial freedom meaning they would like have more disposable resources for themselves.

8 0
2 years ago
The key decisions and plans in corporate strategy address: What business are we in and how will we allocate resources among thes
serious [3.7K]
This is A. true i think
4 0
2 years ago
Other questions:
  • According to diffusion of innovation, in order for an innovation to ultimately be adopted it has to be
    12·1 answer
  • If the cross-price elasticity of demand between two goods is 1.75, then the two goods are:A) complements.B) substitutes.C) luxur
    14·1 answer
  • How long does PowerPoint maintain your customization options?
    9·1 answer
  • Each day, Tasty Tortilla Company incurs total costs of $8,000 to process flour into tortillas. The company can then sell the tor
    5·1 answer
  • Julio decides his business will begin staying open until 7 p.m. instead of 6 p.m. The next day, the shop stays open until 7 p.m.
    11·1 answer
  • Assume the U.S. interest rate is 7.5 percent, the New Zealand interest rate is 6.5 percent, the spot rate of the NZ$ is $.52, an
    5·1 answer
  • Hodgkiss Mfg., Inc., is currently operating at only 94 percent of fixed asset capacity. Current sales are $840,000. Fixed assets
    13·1 answer
  • Which of the following is true of high-performance work practices? A) It involves well-structured job responsibilities as oppose
    5·1 answer
  • Gerritt wants to buy a car that costs $28,250. The interest rate on his loan is 5.45 percent compounded monthly and the loan is
    11·1 answer
  • a manufacturer reports the following costs to produce 11,000 units in its first year of operations: direct materials, $11 per un
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!