**Contents**show

## How do you find preferred dividends on a balance sheet?

**Multiply the amount stated by the number of shares issued and outstanding to** calculate preferred stock dividends due. For example, if the amount is $4, which means the amount the company pays per share, and there are 50,000 preferred shares issued and outstanding, multiply $4 times 50,000 shares.

## What are preferred dividends?

Preferred dividends **are paid to holders of a company’s preferred stock**. If a company’s profits aren’t enough to pay all shareholders a dividend, the company will pay its preferred shareholders their preferred dividends and the shareholders of the company’s common stock will miss out on that round of dividends.

## How do you calculate preferred dividends in arrears?

**Multiply the number years of missed dividend payments by the annual dividend per share** to calculate the dividends in arrears per share. In the example, multiply $5 by two years to get $10 per share of dividends in arrears.

## How do you account for preferred stock?

To comply with state regulations, the par value of preferred stock is recorded in its own **paid-in capital account** Preferred Stock. If the corporation receives more than the par amount, the amount greater than par will be recorded in another account such as Paid-in Capital in Excess of Par – Preferred Stock.

## How do you calculate annual preferred dividends?

Preferred Share Annual Dividend Formula

To find the annual dividend, **multiply the par value by the dividend rate**. For example, if the preferred shares have a par value of $50 and a dividend rate of 6 percent, multiply $50 by 0.06 to find that the preferred share pays a $3 annual dividend.

## How do you calculate preferred pay?

**Multiply the preferred dividends per share by the number of shares the company issued** to find the total annual dividends paid to preferred shares. In this example, if the company issued 65,000 preferred shares, multiply 65,000 by $1.89 to find the company pays $122,850 in preferred dividends each year.