Question
Otter Tail, Inc., began operations in January 2015 and had the following reported net income or loss for each of its 5 years of operations:
Otter Tail, Inc., began operations in January 2015 and had the following reported net income or loss for each of its 5 years of operations:
2015 $ 150,000 loss
2016 $ 130,000 loss
2017 $ 120,000 loss
2018 $ 250,000 income
2019 $ 1,000,000 income
At December 31, 2019, Otter Tail's capital stock was comprised of the following:
Common stock, $10 par (100,000 shares authorized; 50,000 shares issued and outstanding) | $500,000 | |
Preferred stock, 4% noncumulative and nonparticipating, $100 par (1,000 shares authorized, issued, and outstanding) | 100,000 | |
Preferred stock, 8% cumulative and fully participating, $100 par (10,000 shares authorized, issued, and outstanding) | 1,000,000 |
Otter Tail has never paid a cash or stock dividend. There has been no change in the capital accounts since Otter Tail began operations. The appropriate state law permits dividends only from retained earnings.
Required:
Complete a statement showing how the dividends would be distributable to the holders of the common shares and preferred shares. Round your answers to the nearest dollar.
Please follow the format in the picture, thank you
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