Xiong Inc. has the following shareholders equity:

Answer these questions about Xiongs dividends:

1. Are Xiong Inc.s preferred shares cumulative or noncumulative? How can you tell? Assume there are no dividends in arrears.

2. Suppose Xiong Inc. declares cash dividends of $17,000 for 2020. How much of the dividends goes to preferred shares? How much goes to common shares? Assume that there are no dividends in arrears.

3. Suppose Xiong Inc. did not pay the preferred dividend in 2018 and 2019. In 2020, the company declares cash dividends of $17,000. How much of the dividends goes to preferred shares? How much goes to common shares?

hint-

Dividing cash dividends between preferred and common shares

3. Preferred, $3,375; Common, $13,625

$ 20,000 Preferred shares, $0.025, cumulative, liquidation value $0.50, 50,000 shares authorized, 45,000 shares issued and outstanding Common shares, 1,000,000 shares authorized and issued and outstanding Retained earnings Total shareholders' equity 200,000 130,000 $350,000