Reference no: EM132959939

Carpenter Distribution Corporation's contributed capital section of its balance sheet follows:

4% Preferred stock: 65,000 shares outstanding, $10 par value $ 650,000

Common stock: $8 par value $ 400,000

During the last two years, Carpenter Distribution Corporation did not declare any dividends to its shareholders. In year 3, Carpenter declares and pays total dividends of $100,000.

Required:

Problem 1: Calculate separately the dividends paid to preferred and common shareholders in year 3 if the preferred stock is cumulative.