Easy Money, Inc., has the following capital structure.

Preferred stock— $100 par value, 20,000 shares authorized, 61,000 shares issued and outstanding	$	100,000
Common stock—$10 par value, 200,000 shares authorized, 80,000 shares issued and outstanding		800,000
Additional paid-in capital		1,032,000
Total contributed capital	$	1,932,000
Retained earnings		581,000
Total stockholders’ equity	$	2,513,000

The number of issued and outstanding shares of both preferred and common stock have been the same for the last two years. Dividends on preferred stock are 8 percent of par value and have been paid each year the stock was outstanding except for the immediate past year. In the current year, management declares a total dividend of $50,000.

a. Indicate the amount that will be paid to both preferred and common stockholders assuming the preferred stock is not cumulative.

b. Indicate the amount that will be paid to both preferred and common stockholders assuming the preferred stock is cumulative.

 

a. Amount to preferred stock Amount to common stock b. Amount to preferred stock Amount to common stock