Township, Inc $\begin{array}{lll}\text { Preferred } & & \text { Common } \\\end{array}$

Short Answer

Township, Inc. has 10,000 shares of 5%, $100 par value, noncumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2014, and December 31, 2015. The board of directors declared and paid a $50,000 dividend in 2014. In 2015, $110,000 of dividends are declared and paid. What are the dividends received by the preferred and common shareholders in 2015? $\begin{array}{lll}\text { Preferred } & & \text { Common } \\\end{array}$
A) $\begin{array}{lll}\ \$0&&&&& \$ 110,000 \\\end{array}$
B) $\begin{array}{lll}\$ 50,000 &&& \$ 60,000 \\\end{array}$
C) $\begin{array}{lll}\$ 55,000 &&& \$ 55,000 \\\end{array}$
D) $\begin{array}{lll}\$ 70,000 &&& \$ 40,000\end{array}$