Refer to the allocation of dividends for Pinecraft Industries Inc. on page 485 . Answer these questions

Question:

Refer to the allocation of dividends for Pinecraft Industries Inc. on page 485 . Answer these questions about Pinecraft's cash dividends:
1. How much in dividends must Pinecraft declare each year before the common shareholders receive any cash dividends for the year?
2. Suppose Pinecraft declares cash dividends of $300,000 for 2014. How much of the dividends go to preferred? How much go to common?
3. Are Pinecraft's preferred shares cumulative or non-cumulative? How can you tell?
4. Pinecraft passed the preferred in 2012 and 2013. Then in 2014, Pinecraft declares cash dividends of $800,000. How much of the dividends go to preferred? How much go to common?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...