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Question
The shareholders equity section of Winters Company contained the following balances as of December 31, 2015:
| Preferred stock (10%, $15 par value, cumulative) | $1,500 |
| Preferred stock (12%, $10 par value , noncumulative) | 1,500 |
| Common stock ($1 par value, 5,000 shares authorized, 3,500 issued and 400 held in treasury) | 3,500 |
| Additional paid-in capital: | |
| Preferred stock (10%) | 1,050 |
| Preferred stock (12%) | 1,275 |
| Common stock | 2,345 |
| Retained earnings | 4,256 |
| Less: Treasury stock | (5,750) |
| Total shareholders equity | $9,676 |
During 2016, Winters entered into the following transaction: On December 2, the company declared a cash dividend of $1,050, which was paid on December 27. Winters did not declare or pay any dividends during 2015. Based on this information, what amount of dividends should be declared and paid to shareholders with common stock?
a. $350
b. $420
c. $570
d. $385
Answer
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