Question

Wildhorse Co. has 13000 shares of 5%, $100 par value, non-cumulative preferred stock and 52000 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 $156000 dividend in 2020. What is the amount of dividends received by the common stockholders in 2020

Answer 1

$91,000

Step-by-step explanation:

Calculation to determine the amount of dividends received by the common stockholders in 2020

Using this formula

Dividends received by the common stockholders=Dividend-(Shares of non-cumulative preferred stock) (Percentage) (Par value)

Let plug in the morning

Dividends received by the common stockholders=$156,000 - (13000) (.05) ($100)

Dividends received by the common stockholders=$156,000-$65,000

Dividends received by the common stockholders=$91,000

Therefore the amount of dividends received by the common stockholders in 2020 is $91,000