Problem#2

In each of the following independent cases, it is assumed that the corporation has $800,000 of 5% preferred stock and $3,200,000 of common stock outstanding, each having a par value of $10. No dividends have been declared for 2016 and 2017. (a) As of 12/31/18, it is desired to distribute $350,000 in dividends. How much will the preferred stockholders receive if their stock is noncumulative and nonparticipating? 2016 Preferred Common

2017 Preferred Common

2018 Preferred Common Total (b) As of 12/31/18, it is desired to distribute $500,000 in dividends. How much will the preferred stockholders receive if their stock is cumulative and nonparticipating ? 2016 Preferred Common

2017 Preferred Common

2018 Preferred Common Total