A company has $100,000 of 10% noncumulative, nonparticipating, preference shares outstanding, and $150,000 of ordinary shares outstanding. In the company's first year of operation, no dividends were paid, but during the second year, it paid cash dividends of $25,000. Compute the dividends to be distributed to (1) preference shares and (2) ordinary shares.

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The Answer of A company has $100,000 of 10% noncumulative, nonparticipating, preference shares outstanding, and $150,000 of ordinary shares outstanding. In the company's first year of operation, no dividends were paid, but during the second year, it paid cash dividends of $25,000. Compute the dividends to be distributed to (1) preference shares and (2) ordinary shares.

A Company Has $100,000 of 10% Noncumulative, Nonparticipating, Preference Shares