MM Corporation was organized on January 1, 2009. During its first year, the corporation issued 40,000 shares of $5 par value preferred stock and 400,000 shares of $1 par value common stock. At December 31, the company declared the following cash dividends:

2009 $ 8,000

2010 $30,000

2011 $70,000

Required:

(a) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 5% and not cumulative.

(b) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 6% and cumulative.