Ask Question
14 October, 14:06

When Crossett Corporation was organized in January 2018, it immediately issued 4,000 shares of $50 par, 6 percent, cumulative preferred stock and 50,000 shares of $20 par common stock. Its earnings history is as follows: 2018, net loss of $35,000; 2019, net income of $125,000; 2020, net income of $215,000. The corporation did not pay a dividend in 2018. Required How much is the dividend arrearage as of January 1, 2019

+4
Answers (1)
  1. 14 October, 17:53
    0
    The correct answer is $12,000.

    Explanation:

    According to the scenario, computation of the given data are as follow:-

    Issued Shares = 4,000

    Shares Per Value = $50

    Percentage of Cumulative Preferred Stock = 6%

    We can calculate the Required Dividend Arrearage by using following formula:-

    As Of January 1,2019 Arrearage Dividend = Issued Share * Value Of Per Share * % Of Cumulative Preferred Stock

    By putting the value, we get

    = 4000 * $50 * 6%

    = $200,000 * 6/100

    = $12,000
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “When Crossett Corporation was organized in January 2018, it immediately issued 4,000 shares of $50 par, 6 percent, cumulative preferred ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers