Question

Outstanding stock of the Nash's Corporation included 30000 shares of $5 par common stock and 8000 shares of 5%, $10 par non-cumulative preferred stock. In 2019, Nash's declared and paid dividends of $1500. In 2020, Nash's declared and paid dividends of $15000. How much of the 2020 dividend was distributed to preferred shareholders

Answer 1

$4,000

Step-by-step explanation:

Calculation of Dividend distributed to Preferred Shareholder

= $8,000 * 5% * $10 Preferred shares

= $4,000

Thus, $4,000 is the amount of dividend which was distributed to preferred shareholders