Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

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Comparing Stock and Cash Dividends
Ritz Company had the following stock outstanding and Retained Earnings at December 31, 2013:

On December 31, 2013, the board of directors is considering the distribution of a cash dividend to the common and preferred stockholders. No dividends were declared during 2011 or 2012. Three independent cases are assumed:
Case A : The preferred stock is noncumulative; the total amount of 2013 dividends would be $30,000.
Case B : The preferred stock is cumulative; the total amount of 2013 dividends would be $30,000. Dividends were not in arrears prior to 2011.
Case C: Same as Case B, except the amount is $75,000.
Required:
1. Compute the amount of dividends, in total and per share, payable to each class of stockholders for each case. Show computations. Round per-share amounts to two decimal places.
2. Complete the following schedule, which compares case C to a 100 percent stock dividend on the outstanding common shares when the stock price was $50.