Answer: $32,800
Explanation:
Every year, the preference shareholders are entitled to the following in dividends;
= 14,100 * 4% * 100
= $56,400
These shares are cumulative which means that if dividends are not paid in one year, they will have to be accured and paid in another.
No dividends were paid in 2019.
In 2020, dividends were $101,000
Preference shareholders would get dividends for both 2019 and 2020 from here so;
= 56,400 + 56,400
= $112,800
They will take all $101,000 and still be owed;
= 112,800 - 101,000
=$ 11,800
In 2021, their Preference dividends will be;
= 56,400 + 11,800
= $68,200
Amount left for Common shareholders in 2021 will therefore be;
= 101,000 - 68,200
= $32,800
