XYZ Company Has 500,000 Common Shares Outstanding and 50,000,$4,cumulative,participating Preferred

question 36

Multiple Choice

XYZ Company has 500,000 common shares outstanding and 50,000,$4,cumulative,participating preferred shares outstanding.Preferred shareholders receive dividends once the common shareholders have received $2 per share.No dividends were declared last year; however,$2,000,000 in dividends were declared this year.How much of the dividend amount is allocated to preferred shareholders?

• A)$460,000.00
• B)$466,666.67
• C)$500,000.00
• D)$571,428.57

---

Definitions:

Reconcile

The process of ensuring that two sets of records, typically bank statements and a company's cash account, are in agreement.

Bank Service Charges

Fees charged by banks for account maintenance, transactions, and other financial services.