Dividend Allocations

Situation 1 Akimoto Company has the following stock outstanding

Common Stock
50,000 shares
$1 par value

Preferred Stock
5,000 shares
$40 par, $ 2 dividend

The amount available for dividends this year is $40,000. Prepare the dividend allocation between the preferred and common stocks.

I really need help on this please.

Brandie

On Preferred stock it tells you that dividends are $2 a share.

Take the $2 times the number of shares issued and outstanding.

The common stock allocation is the total amount less the dividends used for the preferred stock