Problem 5 (8 points)

Wellstone Corporation has the following capital stock outstanding:

$10 par value common stock, outstanding 150,000 shares.

8% preferred stock, par $800, 2,000 shares, with 2 years in arrears.

Cash dividends of $400,000 were declared and paid near the end of the current year.

Requirements:

Assume that the preferred stock is cumulative.Calculate:

Dividends received by the preferred stockholders

Dividends received by the common stockholders

Show computations here: