Cardinals Inc. has the following shares outstanding:

40,000, $ 0.80, no par value preferred shares $ 400,000

60,000 no par value common shares $ 600,000

All shares were sold for $ 10 each.

No dividends have been declared since December 31, 2017. It is now December 31, 2020, and the board of directors wants to distribute $ 204,000 in dividends.

Instructions

Calculate how much the preferred and common shareholders will receive under each of the following assumptions:

a) The preferred is cumulative and participating to 12% total.

b) The preferred is cumulative and participating to $1.00 per share.