Question - Sleep Corporation was organized on January 1, 2017. During its first year, the corporation issued 40,000 shares of $5 par value preferred stock and 400,000 shares of $1 par value common stock. At December 31, the company declared the following cash dividends:
2017 $6,000
2018 $30,000
2019 $60,000
a) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 4% and not cumulative. (Show calculations)
b) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 6% and cumulative. (Show calculations)