Otter Tail, Inc., began operations in January 2015 and had the following reported net income or loss for each of its 5 years of operations:

At December 31, 2019, Otter Tail’s capital stock was comprised of the following:

Otter Tail has never paid a cash or stock dividend. There has been no change in the capital accounts since Otter Tail began operations. The appropriate state law permits dividends only from retained earnings.

Required:
Prepare a worksheet showing the maximum amount available for cash dividends on December 31, 2019, and how it would be distributable to the holders of the common shares and each of the preferred shares. Show supporting computations in good form.

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$ 150,000 loss 130,000 loss 120,000 loss 250,000 income 1,000,000 income 2015 2016 2017 2018 2019 Common stock, $10 par (100,000 shares authorized; 50,000 shares issued and outstanding) Preferred stock, 4% noncumulative and nonparticipating, $100 par (1,000 shares authorized, issued, and outstanding) Preferred stock, 8% cumulative and fully participating, $100 par (10,000 shares authorized, issued, and outstanding) 1,000,000 $ 500,000 100,000