Compute the amount of dividends

Reference no: EM13755449

Smith Company has had 10,000 shares of 8%, $100 par-value preferred stock, and 15,000 shares of $10 par-value common stock outstanding for the last two years. During the most recent year, dividends paid totaled $100,000; in the prior year, dividends paid totaled $60,000.

Required: Compute the amount of dividends that must have been paid to preferred stockholders and common stockholders in each of the years, given the following independent assumptions:

a. Preferred stock is nonparticipating and noncumulative.

b. Preferred stock is nonparticipating and cumulative.

Reference no: EM13755449

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