Dividend decisions
Acme Sports has $100,000 of 8% noncumulative, nonparticipating, preferred stock outstanding. Acme Sports also has $500,000 of common stock outstanding. In the company's first year of operation, no dividends were paid. During the second year, Acme Sports paid cash dividends of $30,000. How should this dividend be distributed between common and preferred stockholders? Show your calculations.