Question
Annette's accessories had the following stock issued and outstanding at January 1, 2019. 150,000 shares of $1 par common stock 10,000 shares of $50 par,
Annette's accessories had the following stock issued and outstanding at January 1, 2019.
150,000 shares of $1 par common stock
10,000 shares of $50 par, 8%, cumulative preferred stock
On March 5, 2019 Annette's declared a $100,000 cash dividend to be paid March 31 to shareholders of record on March 21.
A. One year's worth of dividends is in arrears for preferred shareholders.
B. Two year's worth of dividends is in arrears for preferred shareholders.
C. Instead of a $100,000 dividend, Annette's paid a $70,000 dividend and one year of dividends was in arrears.
Alternative 1- Actual Numbers | Distribution to Shareholders | ||
Preferred | Common | ||
Total dividend declared | 100,000.00 | ||
Preferred Arrearage | - | - | |
Current Preferred Dividend | 40,000.00 | 40,000.00 | |
Available & Distributed to Common | 60,000.00 | 60,000.00 | |
Total dividend declared | - | 40,000.00 | 60,000.00 |
Dividends in Arrears | - |
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