The Bayside Corporation had stock outstanding during its first five years of operation: 4,000 shares of 5%,
Question:
The Bayside Corporation had stock outstanding during its first five years of operation: 4,000 shares of 5%, $100 par, non-cumulative, fully participating preferred and 10,000 shares of $10 par common.
At the end of each of the five years, the cash and retained earnings balances were as follows:
Year Cash Retained Earnings
1 $5,000 $6,000
2 7,000 8,000
3 19,000 18,000
4 28,000 30,000
5 30,000 36,000
In each year, Bayside paid the maximum amount of cash dividends.
determine the amounts to be paid to preferred and to common in each year.