The outstanding capital stock of Robbins Corporation consisted of 3,000 shares of 10 percent preferred stock, USD 250 par value, and 30,000 shares of no-par common stock with a stated value of USD 250. The preferred was issued at USD 412, the common at USD 480 per share. On 2005 January 1, the retained earnings of the company were USD 250,000. During the succeeding five years, net income was as follows:
|
2005 |
$767,500 |
|
2006 |
510,000 |
|
2007 |
48,000 |
|
2008 |
160,000 |
|
2009 |
662,500 |
No dividends were in arrears as of 2005 January 1, and during the five years 2005-2009, the board of directors declared dividends in each year equal to net income of the year. Prepare a schedule showing the dividends declared each year on each class of stock assuming the preferred stock is:
a. Cumulative.
b. Noncumulative.