Exercise 15-21

The outstanding capital stock of Cullumber Corporation consists of2,000shares of $100par value,7% preferred, and4,500shares of $50par value common.

Assuming that the company has retained earnings of $85,500, all of which is to be paid out in dividends, and that preferred dividends were not paid during the 2 years preceding the current year, state how much each class of stock should receive under each of the following conditions.

(a)The preferred stock is noncumulative and nonparticipating.(Round answers to 0 decimal places, e.g. $38,487.)

Preferred

Common

$

$

(b)The preferred stock is cumulative and nonparticipating.(Round answers to 0 decimal places, e.g. $38,487.)

Preferred

Common

$

$

(c)The preferred stock is cumulative and participating.(Round the rate of participation to 4 decimal places, e.g.1.4278%. Round answers to 0 decimal places, e.g. $38,487.)

Preferred

Common

$

$