PREFERRED AND COMMON CASH DIVIDENDS

The Keener Company has had 1,000 shares of 7%, $100 par-value preferred stock and 40,000 shares of $5 stated-value common stock outstanding for the last 3 years. During that period, dividends paid totaled $6,000, $28,000, and $30,000 for each year, respectively.

Required: Compute the amount of dividends that Keener must have paid to preferred stockholders and common stockholders in each of the 3 years, given the following three independent assumptions:

1. Preferred stock is nonparticipating and noncumulative.

2. Preferred stock is nonparticipating and cumulative.

(from Intermediate Accounting, Ninth Edition; Nikolai and Bazley)