Answer:
Common dividends= $80,000
Explanation:
A non-cumulative preference shares qualifies the investors to receive a fixed amount of dividend . However, where dividends are not paid in a particulars those arrears dividend are lost and never carried forward to subsequent years for payment.
Preference dividend= Fixed dividend % × Nominal value of shares
A common stock on the other, entitles the shareholders to residual dividends after he claims of preference share holders have been met.
The common dividend = Total dividends - preference dividends
= 120,000 - (4%× 10,000× 100)
= 80,000
Answer:
$80,000
Explanation:
To calculate dividend to common stock holders we deduct the dividend paid to non cumulative preferred stock from the total dividend. This is shown below:
Divided paid to Preferred Stock = 10,000 x 100 x 0.04 = $40,000
Dividend paid to Common Stockholders = 120,000 - 40,000 = $80,000
Hence, the dividend paid to common stockholders in 2018 is $80,000.
