DX Had the Following Shares Outstanding: (Matching Dividend,if Applicable,$6)

question 43

Multiple Choice

DX had the following shares outstanding: (Matching dividend,if applicable,$6) The preferred shares are cumulative,fully participating; dividends are three years in arrears,excluding the current year; dividends declared in the current year amount to $42,000.The total amount of dividends to which preferred shareholders are entitled is:

• A) $16,000
• B) $20,000
• C) $24,500
• D) $26,000

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Definitions:

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Net Sales

The amount of sales revenue remaining after deducting returns, allowances for damaged or missing goods, and discounts.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period of time, resulting in a net profit or loss.

Budgeted Amounts

Estimated financial figures planned for a certain period, including revenues and expenses.