QS 11-12 (Algo) Dividend allocation between classes of shareholders LO C2 Stockholders' equity of Ernst Company consists of 85,000 shares of $5 par value, 11% cumulative preferred stock and 305 of $1 par value common stock. Both classes of stock have been outstanding since the company's inception. Ernst did not dividends in the prior year, but it now declares and pays a $150,000 cash dividend at the current year-end. Determine the amount distributed to each class of stockholders for this two-year-old company. Calculation of preferred dividend: Total cash dividend Par Value per Preferred Share Dividend Rate Dividend per Preferred Number of Preferred Share Shares Preferred Dividend for two years To preferred shareholders To common shareholders $ 0