Homestead Oil Corp. was incorporated on January 1, 2013, and issued the following stock for cash:
800,000 shares of no-par common stock were authorized; 150,000 shares were issued on January 1, 2013, at $19 per share.
200,000 shares of $100 par value, 9.5% cumulative, preferred stock were authorized, and 60,000 shares were issued on January 1, 2013, at $122 per share.
Net income for the years ended December 31, 2013 and 2014, was $1,300,000 and $2,800,000, respectively.
No dividends were declared or paid during 2013. However, on December 28, 2014, the board of directors of Homestead declared dividends of $1,800,000, payable on February 12, 2015, to holders of record as of January 19, 2015.
PART A:
1. The issuance of common stock and preferred stock on January 1, 2013.
2. The declaration of dividends on December 28, 2014.
3.The payment of dividends on February 12, 2015.
PART B:
1.Of the total amount of dividends declared during 2014, how much will be received by preferred shareholders?