Problem
Ritz Company had the following stock outstanding and Retained Earnings at December 31, 2015:
Common stock (par $1; outstanding, 520,000 shares) $ 520,000
Preferred stock, 8% (par $10; outstanding, 21,200 shares) 212,000
Retained earnings 902,000
On December 31, 2015, the board of directors is considering the distribution of a cash dividend to the common and preferred stockholders. No dividends were declared during 2013 or 2014.
Three independent cases are assumed:
Case A:
The preferred stock is noncumulative; the total amount of 2015 dividends would be $32,000.
Case B:
The preferred stock is cumulative; the total amount of 2015 dividends would be $32,000. Dividends were not in arrears prior to 2013.
Case C:
Same as Case B, except the amount is $77,000.
Required:
1-a. Compute the amount of dividends in total payable to each class of stockholders if dividends were declared as described in each case.
1-b. Compute the amount of dividends per share payable to each class of stockholders if dividends were declared as described in each case. (Round your answers to 2 decimal places.)