Jane Kathryn has 30,000 shares outstanding of $10 par value, 10% preferred stock and 100,000 shares outstanding $5 par value common stock

In the first 3 years of operations, the company paid dividends in Year 1, $0; Year 2, $40,000; Year 3, $100,000. Calculate the dividend paid to preferred and common stockholders under the following independent situations:

a) Preferred is non-cumulative and nonparticipating.
Year Preferred Common
1 ________ ________
2 ________ ________
3 ________ ________

b) Preferred is cumulative and nonparticipating.
Year Preferred Common
1 ________ ________
2 ________ ________
3 ________ ________

c) Preferred is cumulative and participating.
Year Preferred Common
1 ________ ________
2 ________ ________
3 ________ ________
What will be an ideal response?

Answer:
a) Preferred is non-cumulative and nonparticipating.
Year Preferred Common
1 0 0
2 30,000 10,000
3 30,000 70,000

b) Preferred is cumulative and nonparticipating.
Year Preferred Common
1 0 0
2 40,000 0
3 50,000 50,000

c) Preferred is cumulative and participating.
Year Preferred Common
1 0 0
2 40,000 0
3 50,000 50,000