The outstanding capital stock of Robbins Corporation consisted of

Problem A The outstanding capital stock of Robbins Corporation consisted of
3,000 shares of 10 percent preferred stock, USD 250 par value, and 30,000 shares of
no-par common stock with a stated value of USD 250. The preferred was issued at
USD 412, the common at USD 480 per share. On 2005 January 1, the retained
earnings of the company were USD 250,000. During the succeeding five years, net
income was as follows:
2005 $767,5002006 510,000
2007 48,000
2008 160,000
2009 662,500
No dividends were in arrears as of 2005 January 1, and during the five years
2005-2009, the board of directors declared dividends in each year equal to net
income of the year.
Prepare a schedule showing the dividends declared each year on each class of
stock assuming the preferred stock is:
a. Cumulative.
b. Noncumulative.



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