Acorporation has 24 comma 000 shares of 10%, $ 60.00 par cumulative preferred stock outstanding and 37 comma 000 shares of nominuspar common stock outstanding. preferred dividends of $ 13 comma 000 are in arrears. at the end of the current year, the corporation declares a dividend of $ 222 comma 000. how is the dividend allocated between preferred and common stockholders?

See below.

Explanation:

Lets summarize the information first.

Cumulative preferred stock @ 10% = 24,000 * 60 = $1,440,000

Common Stock = 37,000 shares

Preferred dividend arrears = $13,000

Total Declared dividend = $222,000

Total Payable for preferred stock this year = 1,440,000*0.10 = $144,000

So total share payable to preferred stock = $144,000 + $13,000 = $157,000

Total payable to common stock holders = $222,000 - $157,000 = $65,000

Hope that helps.

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