Platinum Trust has the following stockholders equity:
PAid in Capitols-
Prefered stock 6%$10 par, 8,000 shares authorized, 6,000 shares issued- $65,000
Common Stock, $0.10, 1,400,000 shares authorized and issued- 140,000
PAid in capitol in excess of par common- 350,000
total paid in capitol 555,000
retained earnings - 275,000
total stock holders equity- 830,000
Requirements
R1. Is Platinum's preferred stock cumulative or noncumulative? How can you tell? Cumulative. You can tell by the % before the par amount.
R2. Platinum declares cash dividends of $15,000 for 2010. How much of the dividends goes to preferred? How much goes to common?
R3. Platinum passed the preferred dividend in 2011 and 2012. In 2013 the company declares cash dividends of $25,000. How much of the dividend goes to preferred? How much goes to common?