Response to the following problem:
Use the data in Exercise to determine the amount of dividends paid each year to each of the two classes of stockholders assuming that the preferred stock is cumulative. Also determine the total dividends paid to each class for the four years combined.
Exercise :
Wade's outstanding stock consists of 40,000 shares of noncumulative 7.5% preferred stock with a $10 par value and also 100,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends.
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,000
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,000
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . 196,000
Determine the amount of dividends paid each year to each of the two classes of stockholders: preferred and common. Also compute the total dividends paid to each class for the four years combined.