Ring A. Ling, Inc., has $800,000 of 4% 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 2016 and 2017. The board of directors desires to distribute $270,000 in dividends on December 31, 2018.

Instructions

Prepare a schedule to show how much will the preferred and common stockholders receive under each of the following independent assumptions:

(a) The preferred is noncumulative and nonparticipating.

(b) The preferred is cumulative and nonparticipating.

(c) The preferred is cumulative and fully participating.

(d) The preferred is cumulative and participating to 7% total.