Preferred Dividends Calculation

Question: Accounting II help please?

Can someone please help me with this problem. I cannot figure out the calculations. Calculate the total dividends and the per-share dividends declared on each class of stock for each of the six years. There are no dividends in arrers. The outstanding stock is 25,000 cumulative, non participating, 6% preferred stock, $20 par and 40,000 shares common stock, $1 par. 2002 dividends 40000, 2003 18000 2004 24000 2005 27000 2006 65000 2007 54000

Any help would be greatly appreciated,Thanks!

Answer: The preferred shares get the first 25000*$20*6%=$30,000/year plus any dividends in arrears (because it is cumulative) before the common shares get any

2002 Pref gets $30,000; common gets remaining $10,000
2003 Pref gets 18,000 and there is a 12,000 shortfall; common gets $0
2004 Pref gets 24000 and now there is a 12,000+6000=18,000 shortfall
2005 Pref gets 27000 and there is a 18000+3000=21000 shortfall
2006 Pref gets 30000+21000=51000 and common gets 14000
2007 Pref gets 30000 and common gets 24000

More generally, Pref gets MIN(cumulative div + arrears, declared dividends. Common gets declared dividends – pref dividends.

To get the per share amounts, divide the total divs for each class by number of shares in each class