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On December 31, 2018, Adelphi Corporation has outstanding 500 shares of $100 par value, 5% cumulative...

On December 31, 2018, Adelphi Corporation has outstanding 500 shares of $100 par value, 5% cumulative and nonparticipating preferred stock, and 8,000 shares of $10 par value common stock. Preferred dividends were paid in 2016 but were not paid in 2017. During 2018, Alpha distributed $40,000 in dividends. Use this information to determine for 2018 the dollar amount of dividends that will be distributed per Common Share. Round answer to closest cent.

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Answer #1
Answer
Particulars Amounts
Total dividend paid $40,000
Less: Preference Dividend
Previous Year Preference Dividend (2017) $ 2,500 = 500*100*5%
Current Year Preference Dividend (2018) $ 2,500 = 500*100*5%
Dividend paid to Common Share (B/f) $35,000
Dividend per common Share (35000/8000) $ 4.38 (rounded off)
* Since preference shares are cummulative, dividend for previous year require to disrtibute.
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