1. Sterling Garde Corporation has 50,000 shares of $1.60 preferred stock outstanding in addition to its common stock. The $1.60 designation means that the preferred stockholders receive an annual cash dividend of $1.60 per share. In 2018, Sterling Garde declares an annual dividend of $500,000. The allocation to preferred and common stockholders is: (Click the icon to view the data.) Read the requirements? 1. How much in dividends must Sterling Garde declare each year before the common stockholders receive any cash dividends for the year? Sterling Garde must declare dividends of $ each year before the common stockholders receive any cash dividends for the year. 2. Suppose Sterling Garde declares cash dividends of $300,000 for 2018. How much of the dividends goes to preferred shareholders? How much goes to common shareholders? Class of Stock 2018 Dividends Preferred Common Total 3. Is Sterling Garde's preferred stock cumulative or noncumulative? How can you tell? Sterling Garde's preferred stock are (1) because they are not specifically designated as (2) - 4. Sterling Garde passed the preferred dividend in 2017 and 2018. Then in 2019, Sterling Garde declares cash dividends of $2,000,000. How much of the dividends goes to preferred shareholders? How much goes to common shareholders? Class of Stock 2019 Dividends Preferred Common Total 1: Data Table Preferred dividend (50,000 shares x 1.60 per share) ..........$ 80,000 Common dividend (remainder: $500,000 - $80,000)........ 420,000 Total dividend................. $ 500,000 2: Requirements Answer these questions about Sterling Garde's cash dividends. 1. How much in dividends must Sterling Garde declare each year before the common stockholders receive any cash dividends for the year? 2. Suppose Sterling Garde declares cash dividends of $300,000 for 2018. How much of the dividends goes to preferred shareholders? How much goes to common shareholders? 3. Is Sterling Garde's preferred stock cumulative or noncumulative? How can you tell? 4. Sterling Garde passed the preferred dividend in 2017 and 2018. Then in 2019, Sterling Garde declares cash dividends of $2,000,000. How much of the dividends goes to preferred shareholders? How much goes to common shareholders