A Corporation Had the Following Stock Outstanding When the Company's

question 2

Essay

A corporation had the following stock outstanding when the company's board of directors declared a $95,000 cash dividend during the current year:
$\begin{array}{|l|r|}\hline \text { Preferred stock, } \$ 100 \text { par, } 6 \%, 5,000 \text { shares issued } & \$ 500,000 \\\hline \text { Common stock, } \$ 10 \text { par, } 75,000 \text { shares issued } & \underline{750,000} \\\hline \text { Total } & \$ 1,250,000\\\hline\end{array}$
Allocate the cash dividend between the preferred and common stockholders assuming the preferred stock is cumulative and nonparticipating and dividends are one year in arrears.

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Definitions:

Revenue

The total amount of money received by a company for goods sold or services provided during a certain time period.

Oil Well Service

A category of services aimed at the maintenance, workover, and completion of oil wells to enhance or maintain their production efficiency.

Activity Variance

The difference between actual activity levels and those projected, affecting budgeted and actual costs.

Total Expenses

The sum of all costs and expenses associated with operating a business.