Reference no: EM132553821

Ayayai Limited's ledger shows the following balances on December 31, 2020:

Preferred shares outstanding: 15,000 shares $300,000

Common shares outstanding: 30,000 shares 2,100,000

Retained earnings 570,000

• Assuming that the directors decide to declare total dividends in the amount of $285,000, determine how much each class of shares should receive if the preferred shares are cumulative and fully participating. Note that one year's dividends are in arrears on the preferred shares, which pay a dividend of $1.00 per share

• Assuming that the directors decide to declare total dividends in the amount of $285,000, determine how much each class of shares should receive if the preferred shares are non-cumulative and non-participating. Note that one year's dividends are in arrears on the preferred shares, which pay a dividend of $1.00 per share

• Assuming that the directors decide to declare total dividends in the amount of $285,000, determine how much each class of shares should receive if the preferred shares are non-cumulative and are participating in distributions in excess of a 7% dividend rate on the common shares. Note that one year's dividends are in arrears on the preferred shares, which pay a dividend of $1.00 per share

Question 1: Calculate preferred and common dividend in each case