Bower Corporation has the following shares outstanding: 15,000 shares of $50 par value, eight percent preferred stock and 50,000 shares of $5 par value common stock. During its first three years in business, the firm declared no dividends in the first year. $28,000 of dividends in the second year and $60,000 of dividends in the third year.
a. If the preferred stock is cumulative, determine the total amount of dividends paid to each class of stock in each of the three years.
b. If the preferred stock is noncumulative, determine the total amount of dividends paid to each class of stock in each of the three years.