Chicago Company' reported the following information at the end of the current year:
Common stock ($8 par value; 35.000 shares outstanding)........... $280,000
Preferred stock, 10% ($ 15 par value; 8,000 shares outstanding)... 120,000
Retained earnings............................................................ 281,000
The board of directors is considering the distribution of a cash dividend to the two groups of stockholders. No dividends were declared during the previous two years. Assume the three cases below are independent of each other.
Case A: The preferred stock is noncumulative; the total amount of all dividends is $31,000. Case B: The preferred stock is cumulative; the total amount of all dividends is $36,000. Case C: The preferred stock is cumulative; the total amount of all dividends is $90,000.
Required:
1. Compute the amount of dividends, in total and per share, that would be payable to each class of stockholders for each case. Show computations.
2. Assume Chicago Company issued a 30 percent common stock dividend on the outstanding shares when the market value per share was $24. Fill in the table below to show how this stock dividend would compare to Case C.

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MOUNT OF DOLLAR INCREASE (DECREASE Item Assets Liabilities Stockholders' equity Cash Dividend-Case C Stock Dividend