Exercise $18-18($Algo$)$ Effect of cumulative, nonparticipating preferred stock on dividends$3$ years $[$LO$18-7]$

The shareholders$$ equity of ILP Industries includes the items shown below. The board of directors of ILP declared cash dividends of $$65$ million, $$115$ million, and $$340$ million in its first three years of operation$2024,2025,$ and $2026,$ respectively.

$($$ in millions$)$

Common stock $ $290$

Paid$-$in capital$$excess of par, common $1,170$

Preferred stock, $8\%1,150$

Paid$-$in capital$$excess of par, preferred $745$

Required:

Determine the amount of dividends to be paid to preferred and common shareholders in each of the three years, assuming that the preferred stock is cumulative and nonparticipating.

Determine the amount of dividends to be paid to preferred and common shareholders in each of the three years, assuming that the preferred stock is noncumulative and nonparticipating.