Written, inc. has outstanding 600,000 shares of $2 par common stock and 120,000 shares of no-par 8% preferred stock with a stated value of $5. the preferred stock is cumulative and nonparticipating. dividends have been paid in every year except the past two years and the current year.
assuming that $126,000 will be distributed as a dividend in the current year, how much will the preferred stockholders receive?

$126,000

Explanation:

Given:

Total outstanding stocks = 600,000

Price per share of common stock = $2

Number of preferred stock = 120,000

Interest rate = 8%

Stock Value = $5

Outstanding year = 3

Total Amount of preferred stock = Principle × Rate × Time

or

Total Amount of preferred stock = ( 120,000 × $5 ) × 0.08 × 3 = $144,000

Since,

The preferred stock value is more than the amount distributed

Hence,

the total amount distributed i.e $126,000 will be received by the preferred stockholders

anjan should should report alteast 5000 on the first apyment and 10,000 each year

explanation: