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Baltic Corporation had the following shares outstanding when the board of directors declared aDividend Distribution Baltic Corporation had the following shares outstanding when the board

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Baltic Corporation had the following shares outstanding when the board of directors declared aDividend Distribution
Baltic Corporation had the following shares outstanding when the board of directors declared a
$100,000 cash dividend:
Required:
(1) Allocate the dividend between the preferred and common shareholders assuming the preferred
shares are cumulative and one year in arrears.
(2) Allocate the dividend between the preferred and common shareholders, assuming the preferred
shares are non-cumulative and that no dividend was paid last year.
$100,000 cash dividend:
Contributed Capital
$3, Preferred Shares, 10,000 shares issued and outstanding $250,000
Common Shares, 50,000 shares issued and outstanding 500,000
Total Contributed Capital $ 750,000
Required:
(1) Allocate the dividend between the preferred and common shareholders assuming the preferred
shares are cumulative and one year in arrears.
(2) Allocate the dividend between the preferred and common shareholders, assuming the preferred
shares are non-cumulative and that no dividend was paid last year.
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