500
The shareholders' equity of Tru Corporation includes $600,000 of $1 par common stock and $1,200,000 par value of 6% cumulative preferred stock. The board of directors of Tru declared cash dividends of $150,000 in 2013 after paying $60,000 cash dividends in each of 2012 and 2011.
What is the amount of dividends common shareholders will receive in 2013?
Tru's common shareholders will receive dividends of $54,000 as a result of the 2013 distribution.
* $72,000 current preference (6% x $1,200,000), thus $12,000 dividends in arrears.
** $72,000 current preference (6% x $1,200,000), thus another $12,000 dividends in arrears.
*** $24,000 dividends in arrears plus the $72,000 current preference.