The records of Hoffman Company reflected the following balances in the stockholders' equity accounts at December 31, 2009:
- Common stock, par $12 per share, 40,000 shares outstanding.
- Preferred stock, 8 percent, par $10 per share, 6,000 shares outstanding.
- Retained earnings, $220,000.
On January 1, 2010, the board of directors was considering the distribution of a $62,000 cash dividend. No dividends were paid during 2008 and 2009.