Question

Capital stock of Barr Company includes:
Common stock, $5 par, 650,000 shares outstanding ........ $3,250,000
Preferred stock, 15 percent cumulative, $60 par, ............ 10,000
shares outstanding ...........................600,000
As of December 31, 2010, two years’ dividends are in arrears on the preferred stock. During 2011, Barr plans to pay dividends that total $360,000.

Required:
1. Determine the amount of dividends that will be paid to Barr’s common and preferred stock- holders in 2011.
2. If Barr paid $280,000 of dividends, determine how much each group of stockholders would receive.


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  • CreatedSeptember 22, 2015
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