Question 5 (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. $480,000

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

Retained earnings. $1,150,000

One year preferred dividend are in arrears

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.