In each of the following independent cases, it is assumed that the corporation has outstanding 20,000, $0.80, preferred shares, with a carrying value of $200,000, and 80,000 common shares, with a carrying value of $800,000. Although dividends have been paid regularly up to 2014, no dividends were declared in 2015 or 2016.

1.At December 31, 2017, the board of directors wants to distribute $125,000 in dividends. How much will the preferred shareholders receive if their shares are cumulative and non-participating?

2.At December 31, 2017, the board of directors wants to distribute $200,000 in dividends. How much will the preferred shareholders receive if their shares are cumulative and participating up to 15% in total?

3.On December 31, 2017, the preferred shareholders received an $80,000 dividend on their shares, which are cumulative and fully participating. How much money was distributed in total for dividends?