Martinez SA’s ledger shows the following balances on December 31, 2022.

Share Capital—Preference, 5%—€10 par value, outstanding 20,000 shares	€ 200,000
Share Capital—Ordinary—€100 par value, outstanding 30,000 shares	3,000,000
Retained Earnings	630,000

Instructions

Assuming that the directors decide to declare total dividends in the amount of €266,000, determine how much each class of shares should receive under each of the conditions stated below. One year’s dividends are in arrears on the preference shares.

a. The preference shares are cumulative and fully participating.

b. The preference shares are non-cumulative and non-participating.

c. The preference shares are non-cumulative and are participating in distributions in excess of a 7% dividend rate on the ordinary shares.