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Cumulative Preferred Dividends
Capital stock of Barr Company includes:
Common stock, $5 par, 640,000 shares outstanding $3,200,000
Preferred stock, 15% cumulative, $50 par, 12,000 shares outstanding 600,000
As of December 31, 2024, 2 years' dividends are in arrears on the preferred stock. During 2025, Barr plans to pay dividends that total $390,000.
Required:
1. Determine the amount of dividends that will be paid to Barr's common and preferred stockholders in 2025.
Total dividend to preferred stockholders $_____
Total dividend to common stockholders $______
2. If Barr paid $283,000 of dividends, determine how much each group of stockholders would receive.
Total dividend to preferred stockholders $______
Total dividend to common stockholders $______
Answer & Explanation
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