*E15-22B (Preferred Dividends) DHR Holding’s accounting records show the following balances on December 31, 2014. 12% Preferred stock—$100 par value, outstanding 20,000 shares $2,000,000 Common stock—$1 par value, outstanding 50,000 shares 50,000 Retained

*E15-22B (Preferred Dividends) DHR Holding’s accounting records show the following balances on December 31, 2014.

12% Preferred stock—$100 par value, outstanding 20,000 shares        $2,000,000

Common stock—$1 par value, outstanding 50,000 shares                             50,000

Retained earnings                                                                                       1,650,000

Instructions

Assuming that the directors decide to declare total dividends in the amount of $500,000, determine how much each class of stock should receive under each of the conditions stated below. One year‘s dividends are in arrears on the preferred stock.

(a) The preferred stock is cumulative and fully participating.

(b) The preferrred stock is noncumulative and nonparticipating.

(c) The preferred stock is noncumulative and is participating in distributions in excess of a 12% dividend rate on the common stock.