Gray Corporation has the following capital structure since its incorporation on January 1, 2015:

10% Preference shares, P100 par, 1,000 shares issued P100,000

Ordinary shares, P50par, 8,000 shares issued 400,000

Although profitable, Gray Corporation did not declare dividends in 2015 and 2016. In 2018, Its board of directors declared a cash dividend of P120,000

Required:

A. Allocate the P120,000 cash dividend between preference shares and ordinary shares assuming preference shares are:

1. Non-cumulative and non-participating
2. Cumulative but non participating
3. Non-cumulative but fully participating
4. Cumulative and fully participating

B. Compute the dividend per preference share and the dividend per ordinary share under each of the assumption mentioned above.