Problem 11-3 Dividends for Preferred and Common Stock

The Stockholders Equity category of Greenbaum Companys balance sheet as of December 31, 2012, appeared as follows:

Preferred stock, $100 par, 8%, 1,000 shares

issued and outstanding $ 100,000

Common stock, $10 par, 20,000 shares

issued and outstanding 200,000

Additional paid-in capital 250,000

Total contributed capital $ 550,000

Retained earnings 450,000

Total stockholders equity $1,000,000

The notes to the financial statements indicate that dividends were not declared or paid for 2010 or 2011. Greenbaum wants to declare a dividend of $59,000 for 2012.

Required

Determine the total and the per-share amounts that should be declared to the preferred and com- mon stockholders under the following assumptions:

1. The preferred stock is noncumulative, nonparticipating.

2. The preferred stock is cumulative, nonparticipating.