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*Ex. 15-126—Dividends on preferred stock.
In each of the following independent cases, it is assumed that the corporation has $400,000 of 6% preferred stock and $1,600,000 of common stock outstanding, each having a par value of $10. No dividends have been declared for 2005 and 2006.

(a)     As of 12/31/07, it is desired to distribute $250,000 in dividends. How much will the preferred stockholders receive if their stock is cumulative and nonparticipating?

(b)     As of 12/31/07, it is desired to distribute $400,000 in dividends. How much will the preferred stockholders receive if their stock is cumulative and participating up to 11% in total?

(c)     On 12/31/07, the preferred stockholders received a $120,000 dividend on their stock which is cumulative and fully participating. How much money was distributed in total for dividends during 2007?

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