FHA Loan Company has 10,000 shares of \($3.50,\) no-par preferred stock and 50,000 shares of no-par common stock outstanding. FHA declared and paid the following dividends during a three-year period: 2006, 520,000; 2007, \($100,000;\) and 2008, \($150,000.

Requirements\) 

1. Compute the total dividends to preferred stock and to common stock for each of the three years if

a. Preferred is noncumulative

b. Preferred is cumulative

2. For case l.b., journalize the declaration of the 2008 dividends on December 28, 2008, and the payment on January 17, 2009. Use separate Dividends Payable accounts for Preferred and Common.