Problem
Sturdley Corporation has 20,000 shares of $100 par value, 7% cumulative preferred stock outstanding and 100,000 of its $1 par value common stock outstanding. In their first four years of operation they paid the following cash dividends:
2011 -0-
2012 $240,000
2013 $280,000
2014 $280,000
Determine the total cash dividends paid during the four years with preferred stock as cumulative and then calculate it again with the preferred stock as non-cumulative.