Halverstein Company's outstanding stock consists of 7,000 shares of cumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividend Declared Year 1 $ 0 Year 2 $ 6,000 Year 3 $ 32,000 The amount of dividends paid to preferred and common shareholders in Year 2 is:

In Year 2 Preferred Stockholders were paid $6,000 , whilst Common Stockholders were paid $0.  

Explanation:

The Preference Shareholders have preference over the Common Stockholders when it comes to payments of dividends.

Also when the Preference Stocks are cumulative, it means that any dividends in arrears need to be honored before the next dividend distribution.

Preference Stock Dividend is the same per year and is calculated as follows :

Preference Stock Dividend = 7,000 × $10 × 5%

                                             = $3,500

Summary of Dividends Paid are as follows :

Year 1

Preference Stock Dividend Paid = $0

Common Stock Dividend Paid = $0

Preference Stock Dividend in Arrears = $3,500

Year 2

Preference Stock Dividend in Arrears for year 1 paid = $3,500

Preference Stock Dividend Paid for year 2 = $ 2,500

Preference Stock Dividend in Arrears = $1,000

Common Stock Dividend Paid = $0

Conclusion :

In Year 2 Preferred Stockholders were paid $6,000 whilst Common Stockholders were paid nothing.  

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know