Question

Sunland, Inc. has 1000 shares of 7%, $10 par value, cumulative preferred stock and 47000 shares of $1 par value common stock outstanding at December 31, 2020. What is the annual dividend on the preferred stock?

Answer 1

700

Step-by-step explanation:

Calculation for the annual dividend on the preferred stock

Annual dividend on the preferred stock=1000 shares of 7%, $10 par value

Annual dividend on the preferred stock=(1000*$10*.07)

Annual dividend on the preferred stock=$700

Therefore the annual dividend on the preferred stock will be $700