Reference no: EM131583668

Question - Carlos Company had the following stock outstanding and Retained Earnings at December 31, 2015:

Common Stock (par $1; outstanding, 390,000 shares) - $ 390,000

Preferred Stock, 7% (par $10; outstanding, 18,000 shares) - 180,000

Retained Earnings - 956,000

On December 31, 2015, the board of directors is considering the distribution of a cash dividend to the common and preferred stockholders. No dividends were declared during 2013 or 2014. Three independent cases are assumed:

Case A: The preferred stock is noncumulative; the total amount of 201 5 dividends would be $14,000.

Case B: The preferred stock is cumulative; the total amount of 2015 dividends would be $14,000. Dividends were not in arrears prior to 2013.

Case C: Same as Case B, except the amount is $57,000.

Required:

1-a. Compute the amount of 2015 dividends, in total, that would be payable to each class of stockholders if dividends were declared as described in each case.

1-b. Compute the amount of 2015 dividends per share payable to each class of stockholders for each case.