(L.OBJ. 5) Dividing dividends between preferred and common stock [10-15 min] Western Co...

(L.OBJ. 5) Dividing dividends between preferred and common stock [10-15 min]

Western Communications has the following stockholders’ equity:

Requirements

1. First, determine whether preferred stock is cumulative or noncumulative.

2. Compute the amount of dividends to preferred and to common for 2010 and 2011 if total dividends are $7,600 in 2010 and $48,000 in 2011.