Dividends on preferred stock.

The stockholders' equity section of Lemay Corporation shows the following on

December 31, 2015:

Preferred stock5%, $100 par, 5,000 shares outstanding $ 500,000

Common stock$10 par, 60,000 shares outstanding 600,000

Paid-in capital in excess of par 200,000

Retained earnings 113,000

Total stockholders' equity $1,413,000

Instructions

Assuming that all of the company's retained earnings are to be paid out in dividends on

12/31/15 and that preferred dividends were last paid on 12/31/13.

1. Show how much the preferred and common stockholders should receive if the

preferred stock is cumulative and non- participating.

2. Show how much the preferred and common stockholders should receive if the

preferred stock is cumulative and fully participating.

3.Show how much the preferred and common stockholders should receive if the

preferred stock is cumulative and partially participating up to 2%.