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Question 2 Rachel’s Designs has 1,700 shares of 5%, $50 par value cumulative preferred stock issued...

Question 2

Rachel’s Designs has 1,700 shares of 5%, $50 par value cumulative preferred stock issued at the beginning of 2016. All remaining shares are common stock. Due to cash flow difficulties, the company was not able to pay dividends in 2016 or 2017. The company plans to pay total dividends of $14,000 in 2018. How much of the $14,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders?

Preferred dividends for 2018
Preferred dividends in arrears for 2016 and 2017   
Remaining dividends to common stockholders
Total Dividends

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