Ultimate Sportswear has $170,000 of 10% noncumulative, nonparticipating, preferred stock outstanding. Ultimate Sportswear also has $570,000 of common stock outstanding. In the company's first year of operation, no dividends were paid. During the second year, the company paid cash dividends of $37,000. This dividend should be distributed as follows:

A. $9250 preferred; $27,750 common.
B. $0 preferred; $37,000 common.
C. $18,500 preferred; $18,500 common.
D. $20,000 preferred; $17,000 common.
E. $17,000 preferred; $20,000 common.


Answer: E

Business

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