Reference no: EM132487997

Point 1: Sweet Company's outstanding stock consists of 2,000 shares of cumulative 4% preferred stock with a $100 par value and 11,000 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.

Dividend Declared

year 1  $3,000

year 2  $7,000

year 3 $37,000

Question 1: The amount of dividends paid to preferred and common shareholders in year 3 is:

Multiple Choice

Option 1: $14,000 preferred; $23,000 common.

Option 2: $8,000 preferred; $29,000 common.

Option 3: $24,000 preferred; $13,000 common.

Option 4: $37,000 preferred; $0 common.

Option 5: $0 preferred; $37,000 common.