At december 31, 2012 and 2013, plank corp. had outstanding 3,000 shares of $100 par value 8% cumulative preferred stock and 15,000 shares of $10 par value common stock. at december 31, 2012, dividends in arrears on the preferred stock were $12,000. cash dividends declared in 2013 totaled $45,000. what amounts were payable on each class of stock? preferred stock common stock

Preference shareholders = $36,000

Equity shareholders = $9,000

Explanation:

As provided the outstanding preference dividend at end of 2012 = $12,000

Total cash dividends declared = $45,000 in the year 2013

Regular preference dividends = $100 3,000 8% = $24,000

Thus, when dividends will be paid in 2013 then firstly they will be used for payment to preference shareholders.

Thus, the company shall pay:

$12,000 + $24,000 = $36,000 to preference shareholders.

Further the balance will be paid to equity shareholders.

= $45,000 - $36,000 = $9,000

advanced placement tests

answer; (inseparability);