Answer:
Dividend of preferred shares = No of shares * Dividend percent * Par value of shares = 2,000 * 7% * $50 = $7,000
Hence, dividend in arrears for the year 2019 and 2020 is $14,000 ($7,000+$7,000). Dividend for 2021 is $7,000
Description Amount
Preferred dividend in arrear for the year 2019 and 2020 $14,000
Add: Preferred dividend for the year 2021 <u>$7,000</u>
Total preferred dividend $21,000
Less: Total dividend <u>$23,000</u>
Dividend for common shareholder (<u>$2,000)</u>
Hence, dividend paid for cumulative preferred share in the year 2021 is $21,000 and the amount paid for common shareholders is $2,000
