Question

Concord Corporation's December 31, 2021 balance sheet showed the following: 9% preferred stock, $20 par value, cumulative, 11000 shares authorized; 8500 shares issued $170000 Common stock, $10 par value, 900000 shares authorized 875000 shares issued, 860000 shares outstanding 8750000 Paid-in capital in excess of par-preferred stock 31500 Paid-in capital in excess of par-common stock Retained earnings Treasury stock (15000 shares) Concord declared and paid a $58600 cash dividend on December 15, 2021. If the company's dividends in arrears prior to that date were $10000, Concord's common stockholders received A. $19300. B. no dividend. C. $33300. D. $48600.

Answer 1

The correct option is A. $19300.How to solve the question?Calculation of dividends for common stockholders:Dividends in arrears = $10,000Ordinary dividend = $58,600Total preferred dividends = (9% * $170,000 * 8,500) = $129,150Total dividends to be paid = Preferred dividends + Ordinary dividends - Dividends in arrears= $129,150 + $58,600 - $10,000= $177,750Dividends per common share = Total dividends available for common shareholders ÷ Total number of outstanding common shares= $177,750 ÷ 860,000= $0.20698 or $0.21Therefore, common stockholders will receive a dividend of $0.21 per share.The total common dividend payment will be calculated as:Common dividend = $0.21 * 875,000= $183,750Thus, the amount of common dividends that the Concord Corporation's common stockholders received is $19,300 ($183,750 - $160,450).Answer: A. $19300.