A Corporation Had the Following Stock Outstanding When the Company's

Essay

A corporation had the following stock outstanding when the company's board of directors declared a $95,000 cash dividend during the current year:
$\begin{array}{|l|r|}\hline\text { Preferred stock, } \$ 100 \text { par, } 6 \%, 5,000 \text { shares issued } & \$ 500,000 \\\hline \text { Common stock, } \$ 10 \text { par, } 75,000 \text { shares issued } & \underline{750,000} \\\hline \text { Total } & \$ 1,250,000\\\hline\end{array}$
Allocate the cash dividend between the preferred and common stockholders assuming the preferred stock is cumulative and nonparticipating and dividends are one year in arrears.