Accounting

The records of Hollywood Company reflected the following balances in the stockholders’ equity accounts at December 31, 2010:

Common stock, par $11 per share, 38,000 shares outstanding

Preferred stock, 11 percent, par $9 per share, 6,000 shares outstanding

Retained earnings, $227,000

On September 1, 2011, the board of directors was considering the distribution of a $85,000 cash dividend. No dividends were paid during the previous two years. You have been asked to determine dividend amounts under two independent assumptions:


a.The preferred stock in noncumulative.

b.The preferred stock in cumulative.

Required:

Determine the total and per share amounts that would be paid to the common stockholders and to the preferred stockholders under the two independent assumptions. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Non Cumulative PREFERRED COMMON
TOTAL 5940 97060 (85000-5940)
PER SHARE 5940/6000=1 79060/38000=2.00


CUMULATIVE?
TOTAL?


I have been working on this problem for severel hours. I tried rereading the book, several times, I also tried going online for examples. I just do not know how to do this. Please help. I just want to understand how to do this. I need the steps.

Thank you
B