Answer:
The $15,500 and $4,500 is distributed to the preferred and common stockholders on the date of payment.
Explanation:
For computing how much is the dividend is distributed to the preferred and common stockholder, first we have to compute them individually.
Since in the question, it is given that total cash dividend is = $20,000
and, the company has 10% preferred stock of 5,000 shares of $15 par, plus the preferred stock has an arrears of $8,000
So, the balance of preferred stock = number of share × price × rate + arrears
= 5,000 × $15 ×10% + $8,000
= $7,500 + $8,000
= $15,500
Thus, the balance of preferred stock is $155,00
And the total cash dividend is $20,000
So, for common stockholders it is equals to=
= Total cash dividend - preference stock dividend
= $20,000 - $15,500
= $4,500
Thus, the common stockholder balance is $4,500
So, the $15,500 and $4,500 is distributed to the preferred and common stockholders on the date of payment.
