Palmer Corporation issued and has outstanding 20,000 shares of $10 par-value common stock and 1,000 shares of $60 par-value 20 percent preferred stock. The board of directors votes to distribute $2,000 as dividends in 2010, $3,000 in 2011, and $53,000 in 2012.
INSTRUCTIONS
Compute the total dividend and the dividend for each share paid to preferred stockholders and common stockholders each year under the following assumed situations.
Case A: The preferred stock is nonparticipating and noncumulative.
Case B: The preferred stock is cumulative and nonparticipating.