The shareholders' equity of Kramer Industries includes the data shown below. During 2019, cash dividends of $150 million were declared. Dividends were not declared in 2017 or 2018.
..................................($ in millions)
Common stock ...........................................................$200
Paid-in capital-excess of par, common ..............................800
Preferred stock, 10%, nonparticipating ................................100
Paid-in capital-excess of par, preferred ..............................270
Required:
Determine the amount of dividends payable to preferred shareholders and to common shareholders under each of the following two assumptions regarding the characteristics of the preferred stock.
Assumption A -The preferred stock is noncumulative.
Assumption B -The preferred stock is cumulative.