Refer to the allocation of dividends for Pinecraft Industries Inc. on page 446. 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 2017. How much of the dividends go to preferred? How

Refer to the allocation of dividends for Pinecraft Industries Inc. on page 446. 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 2017. 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 dividend in 2015 and 2016. Then in 2017, 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...

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