1. On December 31, 2021, Black Knights Ltd.s (BKL) shareholders equity was as follows:

• Preferred shares - $5, no par, 8,000 shares outstanding.$400,000
• Common shares no par, 60,000 shares outstanding800,000
• Retained earnings..240,000
• Total shareholders equity..$1,440,000

Required (8 marks):

1. Assuming that preferred dividends were last paid on December 31, 2019, and that all of the companys retained earnings are to be paid out in dividends on December 31, 2021, how much should each class of shares receive if the preferred shares are cumulative and fully participating?
2. How much should each class of shares receive with the same information as above EXCEPT for the preferred shares are not cumulative?