Answer the following question:

On 31 December 20X5, AstroKnight Inc. reported the following in shareholders' equity:

Preferred shares, no-par value; $1.00 dividend, authorized, unlimited shares; issued, 75,000 shares	$1,875,000
Common shares, no-par value; authorized, unlimited shares; issued, 300,000 shares	$3,900,000
Retained earnings	$6,100,000

Dividends of $405,000 are declared in 20X6.

Calculate dividends to be paid to preferred and common shares in this case:

Preferred Cumulative? Yes

Dividends Last Paid in: 20X5

Preferred Participating? Yes, after common receive $0.50 per share; participation based on relative dividends at base level

Answer:

$75,000 base $60,000 part Total: $135,000

$150,000 base $120,000 part Total $270,000

$405,000

Remaining Dividend: 180000. Use formula remaining dividend available / total carrying value of participating shares when getting answer.