The Corporate Charter of Pinkston Corporation Authorizes the Issuance of 25,000

Essay

The corporate charter of Pinkston Corporation authorizes the issuance of 25,000 shares of 5% cumulative, preferred stock, $20 par, and 200,000 shares of $10 par common stock. At the end of the current year, the titles and balances of stockholders' equity accounts are as follows:
$\begin{array}{lr}\text { common stock, 200,000 shares authorized, }\\\\50,000 \text { shares issued and outstanding } & \$ 50,000 \\\text { Paid-in capital in excess of par - common stock } & 300,000 \\\text { Preferred stock } 25,000 \text { shares issued and outstanding } & 500,000 \\\text { Paid-in capital in excess of par - preferred stock } & \underline{ 100,000} \\ \text { Total Paid-in capital } & 1,400,000 \\\text { Retained earnings } & \underline{ 850,00} \\\text { Total Stockholders' Equity } & \underline{\$ 2,250,000}\end{array}$
Pinkston declared dividends of $120,000 for the current year.Required:What is the amount of the annual dividend per share for preferred stock? If there are two years of preferred dividends in arrears at the beginning of the current year, what total amount of dividends will be paid to the preferred shareholder? What total amount will be paid to the common shareholders if there are two years of preferred dividends in arrears at the beginning of the year?