Potter Company has an outstanding 20,000 shares of $50 par value, 8% preferred stock and 60,000 shares of $5 par value common stock. During its first three years in business, it declared and paid no cash dividends in the first year, $280,000 in the second year, and $80,000 in the third year.
a.) If the preferred stock is cumulative, determine the total amount of cash dividends paid to each class of stock in each of the three years.
b.) If the preferred stock is noncumalitive, determine the total amount of cash dividends paid to each class of stock in each of the three years.
