On December 31, 2020, the shareholders' equity of Finland Corporation shows the following: Preferred...
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Accounting
On December 31, 2020, the shareholders' equity of Finland Corporation shows the following:
Preferred shares$ 6, no par, 8,000 shares outstanding................. $ 400,000
Common sharesno par, 60,000 shares outstanding...................... 800,000
Retained earnings............................................................................. 240,000
Total shareholders' equity................................................................ $ 1,440,000
Assume that preferred dividends were last paid on December 31, 2018, and that all of the company's retained earnings are to be paid out in dividends on December 31, 2020.
Instructions
If the preferred shares are cumulative and fully participating, calculate:
- The amount of dividend distributed to the preferred shareholders, and
- The amount of dividend distributed to the common shareholders.
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