Illustration: In 2015, Mason Company is to distribute 50,000 as cash dividends, its outstanding ordinary shares have a par value of 400,000, and its 6 percent preference shares have a par value of 100,000. 2. If the preference shares are cumulative and non-participating, and Mason Company did not pay dividends on the preference shares in the preceding two years: Dividends in arrears, 6% of 100,000 for 2 years Current year's dividend, 6% of 100,000 The remainder to ordinary Totals ILLUSTRATION 15A-2 Preference Ordinary Total