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Question: A Corporation has 12,000 shares of 15%, $84 par non-cumulative preferred stock outstanding, and...

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Accounting

Question: A Corporation has 12,000 shares of 15%, $84 par non-cumulative preferred stock outstanding, and 20,000 shares of no-par common stock outstanding. At the end of the current year, the corporation declares a dividend of $220,000. How is the dividend allocated between preferred and common stockholders?

Answer options:

The dividend is allocated $68,800 to preferred stockholders and $151,200 to common stockholders.

The dividend is allocated $187,000 to preferred stockholders and $33,000 to common stockholders.

The dividend is allocated $33,000 to preferred stockholders and $187,000 to common stockholders.

The dividend is allocated $151,200 to preferred stockholders and $68,800 to common stockholders.

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