At the beginning of its first year of operations, Northwoods Limited has 5,000, $4 preferred shares and 50,000 common shares. Using the format shown below, allocate the total dividend paid in each year to the preferred and common shareholders, assuming that the preferred shares are (a) noncumulative, and (b) cumulative.
Year 1 $20,000 (div paid)
Year 2 $15,000
Year 3 $30,000
Year 4 $35,000