How much is the dividend arrearage as of january

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Question - When Higdon Corporation was organized in January 2014, it immediately issued 5,600 shares of $47 par, 7 percent, cumulative preferred stock and 12,000 shares of $8 par common stock. The company's earnings history is as follows: 2014, net loss of $12,100; 2015, net income of $62,000; 2016, net income of $84,700. The corporation did not pay a dividend in 2014.

a. How much is the dividend arrearage as of January 1, 2015?

b. Assume that the board all directors declares a $50,848 cash dividend at the end of 2015 (remember that the 2014 and 2015 preferred dividends are due). How will be dividend be divided between the preferred and common stockholders?

Reference no: EM131695669

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