Where do preferred stocks go on the P&L?
The amount received from issuing preferred stock is reported on the balance sheet within the stockholders’ equity section.
Only the annual preferred dividend is reported on the income statement. The annual preferred dividend requirement is subtracted from a corporation’s net income and the remainder is described as the Income Available for Common Stock.
Learn more about Stockholders’ Equity.
About the Author: Harold Averkamp (CPA) has worked as an accountant, consultant, and university accounting instructor for more than 25 years.He is the author of the 2010 Master Accounting Download Package which has been praised for it's ability to simplify accounting in a way that anybody can understand.
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