STOCK ALLOCATION ON DIVIDENDS

Timber Ridge Corporation was organized on January 1, 2015. During its first year, the corporation issued 40,000 shares of $5 par value preferred stock and 400,000 shares of $1 par value common stock. At December 31, the company declared the following cash dividends:

• 2015$ 8,000
• 2016$10,000
• 2017$30,000

(a)Show the allocation of dividends for all three years to each class of stock, assuming the preferred stock dividend is 5% and not cumulative.

b)Show the allocation of dividends for all three years to each class of stock, assuming the preferred stock dividend is 6% and cumulative. Note: Show computations of 2017 Preferred Shares Dividends.