Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall

Exercise 5

Preferred stock-calculate dividend amounts Rosie, Inc., did not pay dividends on its $4.50, $50 par value, cumulative preferred stock during 2015 or 2016, but had met its preferred dividend requirement in all prior years. Since 2011, 42,000 shares of this stock have been outstanding. Rosie, Inc., has been profitable in 2017 and is considering a cash dividend on its common stock that would be payable in December 2017.
Required:
Calculate the amount of dividends that would have to be paid on the preferred stock before a cash dividend could be paid to the common stockholders.