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Oceanview Wholesale Merchandise had 20,000 shares of 6%, $20 par value preferred stock and
15,000 shares of $25 par value common stock outstanding throughout 2014. Assuming that total
dividends declared in 2014 were $60,000 and that the cumulative preferred stock dividends have
not been paid after 2012, the common stockholders should receive total 2014 dividends of
Solution
Dividend declared in year 2014 = 60000
(-) Dividend on preferred stock
Year 2013 (20000 * 20 * 6%) = 24000
Year 2014 (20000 * 20 * 6%) = 24000
Total dividend on preferred stock = 48000
Dividend to common stockholders = 12000
Conclusion: - the common stockholders should receive total 2014 dividends of amounting to
$12000.
Assumption:- Dividend on preferred stock is paid in Year 2012 as per the language of the
question.

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  • 1. Oceanview Wholesale Merchandise had 20,000 shares of 6%, $20 par value preferred stock and 15,000 shares of $25 par value common stock outstanding throughout 2014. Assuming that total dividends declared in 2014 were $60,000 and that the cumulative preferred stock dividends have not been paid after 2012, the common stockholders should receive total 2014 dividends of Solution Dividend declared in year 2014 = 60000 (-) Dividend on preferred stock Year 2013 (20000 * 20 * 6%) = 24000 Year 2014 (20000 * 20 * 6%) = 24000 Total dividend on preferred stock = 48000 Dividend to common stockholders = 12000 Conclusion: - the common stockholders should receive total 2014 dividends of amounting to $12000. Assumption:- Dividend on preferred stock is paid in Year 2012 as per the language of the question.