Question

In its first year of operations, the clothing cove has a net income of $143,000 and pays dividends at the end of the year of $94,000 (1 per share) on all common shares outstanding and $910 on all preferred shares outstanding. What is the total amount of dividends paid by the clothing cove?

1) $94,910
2) $95,910
3) $143,910
4) $144,910

Answer 1

The total amount of dividends paid by Clothing Cove is the sum of dividends on common shares and preferred shares. After adding $94,000 paid for common shares to $910 paid on preferred shares, the total dividends paid amount to $94,910.

The correct option is 1)

Step-by-step explanation:

The question relates to calculating the total amount of dividends paid by a company known as Clothing Cove. To find the total amount of dividends paid, we simply add the dividends paid on common shares to the dividends paid on preferred shares. In this case, Clothing Cove pays $94,000 in dividends on its common shares plus an additional $910 in dividends on its preferred shares.

The total amount of dividends paid would therefore be:

$94,000 (for common shares) + $910 (for preferred shares) = $94,910

The correct answer is 1) $94,910. This demonstrates how to calculate total dividends when dealing with both common and preferred shares.