A) Dividend Distribution to Preferred and Common Stockholders.

The Corporation has the following shares outstanding as of December 31, 2019: 10,000 Preferred stock, 8%, par value $20; issued and outstanding. 300,000 Common stock, par value $1; issued and outstanding. No dividends were declared or paid during 2017 and 2018. During 2019 the Board of Directors declared a dividend (Cash Dividend) of $54,000. INSTRUCTIONS: 1. Calculate annual dividend limit for preferred stockholders:

2. Distribute the dividend declared by the Board of Directors to preferred stockholders and common stockholders. (Demonstrate computations to receive points). Total Total Dividend ........................... . . . . . . . . . . . . . . . . . . . . . . . . . . . .......$54,000 a) Preferred Stock is cumulative: (Computations) 2017 2018 2019 Preferred Stockholders

Common Stockholders

Total

b) Preferred Shares are NOT cumulative: (Computations) 2017 2018 2019 Preferred Stockholders

Common Stockholders Total