The shareholders' equity of Red Corporation includes $200,000 of $1 par common stock and $400,000 par of 6% cumulative preferred stock.

The board of directors of Red declared cash dividends of $50,000 in 2021 after paying $20,000 cash dividends in 2020 and $40,000 in 2019.

What is the amount of dividends common shareholders will receive in 2021?

a. $18,000.
b. $22,000.
c. $26,000.

b. 22,000

Explanation:

The computation of amount of dividends common shareholders is shown below:-

Amount of annual preferred stock dividend that preferred stockholders are supposed to get.

= $400,000 par value × 6% = $24,000

          Total Cash         Paid to          Paid to       Dividends in Arrears at

           Dividend paid     Preferred      Common        Year end

2011         $40,000        $24,000        $16,000

2012         $20,000       $20,000                              $4,000

2013          $50,000      $28,000         $22,000

Total         $110,000      $72,000          $38,000

Amount of Dividend Common Shareholders will receive in 2013 = $ 22,000

This is because, out of $ 50,000 dividend declared, $ 28000 will be for preferred stockholders ($24000 annual + $4000 arrears)

answer; (d) i believe that the correct answer is ; /// a new invention lowers the cost of production;

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.