Determine the dividend for common shareholders


Response to the following problem:

Win Inc has 10,000 shares of 7% $100 par value cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at Dec 31, 2012. If the board declares a $60,000 dividend, the

a. preferred shareholders will receive 1/10th of what the common shareholders will receive

b. preferred shareholders will receive the entire $60,000

c. $60,000 will be held as restricted retained earnings and paid out at some future date

d. preferred shareholders will receive $30,000 and the common shareholders will receive the same.

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Managerial Accounting: Determine the dividend for common shareholders
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