Rhodes Wholesale Merchandise had 4,000 preferred shares of $5 no par value issued at $20 per share and 15,000 common shares of no par value issued at $25 per share throughout 2001. These data apply to each of the independent situations below.
#1. Assuming that total dividends declared in 2001 were $80,000 and that the preferred shares are cumulative with two years' preferred dividends in arrears on December 31, 2000, the preferred shareholders should receive 2001 dividends totalling: $
#2. Assuming that total dividends in 2001 were $30,000 and that the preferred shares are cumulative with one year's preferred dividends in arrears on December 31, 2000, the preferred shareholders should receive 2001 dividends totalling
2 yrs at $20,000 = $40,000
2001 = $20,000
So, the preferred shareholders should receive 2001 dividends totalling $60,000