Kerry Company has 1,000 shares of $100 par value, 9% preferred stock and 10,000 shares of $10 par value common stock outstanding. The preferred stock is cumulative and nonparticipating.
Dividends were paid in 2008. Since 2008, Kerry has declared and paid dividends as follows:
2009..............................$ 0
2010..........................10,000
2011..........................20,000
2012..........................25,000
Required
1. Determine the amount of the dividends to be allocated to preferred and common stockholders for each year 2010 to 2012.
2. If the preferred stock had been noncumulative, how much would have been allocated to the preferred and common stockholders each year?