Rensing, Inc., has $800,000 of 5% preferred stock and $1,200,000 of common stock outstanding, each having a par value of $10 per share. No dividends have been paid or declared during 2013 and 2014. As of December 31, 2015, it is desired to distribute $340,000 in dividends.

Instructions

How much will the preferred and common stockholders receive under each of the following assumptions:

(a) The preferred is noncumulative and nonparticipating.

(b) The preferred is cumulative and nonparticipating