d35 Cumulative Dividends tkinson Data Services Corporation was founded on January 1, 20X1. Preferred stock, no par, cumulative $4 annual dividend per share Issued and outstanding, 1,000,000 shares Capital stock, no par, 6,000,000 shares Total stockholders' equity 50,000,000 90,000,000 $140,000,000 The corporation's subsequent net incomes (losses) were as follows: 20X1 20X2 20X3 20x4 20x5 $ (5,000,000) (4,000,000) 16,000,000 20,000,000 14,000,000 ssume the board of directors declared dividends to the maximum extent permissible by law. The state prohibits dividend declarations that cause negative retained earnings. I. Tabulate the annual dividend declarations on preferred and common shares. There is no trea- sury stock. 2. How w not cumulative