Reference no: EM132748126

Question: STOCK ALLOCATION ON DIVIDENDS

Timber Ridge Corporation was organized on January 1, 2015. 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:

2015 $ 8,000

2016 $10,000

2017 $30,000

(a) Show the allocation of dividends for all three years to each class of stock, assuming the preferred stock dividend is 5% and not cumulative.

b) Show the allocation of dividends for all three years to each class of stock, assuming the preferred stock dividend is 6% and cumulative. Note: Show computations of 2017 Preferred Shares Dividends.