Question 4 (15 Marks)

On January 1, 2020, the accounts of Jafar Power Incorporated reflected the following:

Preferred shares, no par value, $3 dividend, cumulative and fully participating 24,000 shares outstanding. $640,000

Common shares, no par value, 72,000 shares outstanding. $1,740,000

Retained earnings. $2,126,000

Dividends on Preferred shares are in arrears one year

The company has declared a total dividend of $640,000 for 2020.

Required:

Calculate the total dividends to be paid to the preferred and common shareholders in 2020.