Accounting 202 Chapter 15 1.

1) The board of directors of Lincoln Corp. wishes to declare a $75,000 cash dividend to be divided between the preferred and common shareholders. The equity accounts prior to the dividend are the following: 8% Preferred Stock (S50 par) Additional Paid in Capital Common Stock ($10 par) Additional Paid in Capital Retained Earnings Total $ 200,000 50,000 350,000 150,000 500,000 $1,250,000 Required: How much of the $75,000 would be allocated to each class of stock under each of the following cases if no dividends have been paid in the prior three years: A.) The preferred stock is cumulative and non-participating. B.) The preferred stock is non-cumulative and partially participating up to 11%. C.) The preferred stock is cumulative and fully participating