Question

Bramble, Inc. has 11200 shares of 3%, $100 par value, noncumulative preferred stock and 224000 shares of $1 par value common stock outstanding at December 31, 2020. There were no dividends declared in 2019. The board of directors declares and pays a $65700 dividend in 2020. What is the amount of dividends received by the common stockholders in 2020?

Answer 1

See

Step-by-step explanation:

Total dividends = 65,700

Common stock outstanding = 224,000 shares

Preferred dividend

= Number of shares × Par value 3%

= 11,200 × 100 × 3%

= $33,600

Dividends received by common stockholders

= (65,700 × 2) - (33,600 × 3)

= 131,400 - 100,800

= 30,600