Response to the following problem:
Rosewell Company has had 5,000 shares of 9%, $100 par-value preferred stock and 10,000 shares of $10 par-value common stock outstanding for the last two years. During the most recent year, dividends paid totaled $65,000; in the prior year, dividends paid totaled $40,000.
Required :
Compute the amount of dividends that must have been paid to preferred stockholders and common stockholders in each year, given the following independent assumptions:
a. Preferred stock is fully participating and cumulative.
b. Preferred stock is nonparticipating and noncumulative.
c. Preferred stock participates up to 10% of its par value and is cumulative.
d. Preferred stock is nonparticipating and cumulative.