Definition

Dividends in arrears

When preferred stock, is cumulative, preferred dividends not declared in a given period are called dividend in arrears.

To illustrate, assume that scientific leasing has 5000 shares of 7% is $35,000 (5,000 but dividends are two years in arrears. In this case, preferred stockholders are entitled to receive the following dividends in the current year.

 

                                     Dividends in areas (35,000              $70,000

                                  Current-year dividends                               35,000                        

                                       Total preferred dividends                            $105,000

Share it:  Cite

More from this Section

  • Bookkeeping
    Bookkeeping is a part of accounting process that involves only the recording of economic ...
  • Savings account or time deposit
    Savings account or time deposit is a sum of money, deposited with a bank, that cannot ...
  • Direct and indirect fixed costs
    A profit center may have both direct and indirect fixed costs. Direct fixed costs relate ...
  • Additional paid-in capital
    Additional paid-in capital includes the excess of amounts paid in over par or stated value ...
  • Bonds
    Bonds are a form of interest-bearing notes payable issued by corporations, universities, ...