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

  • Notes receivables
    Notes receivables are claims for which formal instruments of credit are issued as proof ...
  • Cost of goods sold
    Cost of goods sold is a category of expenses of a merchandising company which refers to ...
  • Promissory note
    A promissory note is a written promise to pay a specified amount of money on demand or ...
  • Closing the books
    At the end of the accounting period, the company makes the accounts ready for the next ...
  • Investing activities
    Investing activities refer to cash flows activities that include (a) purchasing and disposing ...