Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 60,000 shares of cumulative preferred 2% stock, $60 par and 300,000 shares of $20 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $51,000; second year, $105,000; third year, $81,000; fourth year, $120,000. Determine the dividends per share on each class of stock for each of the four years. Round your answers to two decimal places. If no dividends are paid in a given year, enter "0".

Year 1: Dividend paid to cumulative preferred stock = $51,000; Dividend paid to common stock = 0.

Year 2: Dividend paid to cumulative preferred stock = $93,000; Dividend paid to common stock = $12,000.

Year 3: Dividend paid to cumulative preferred stock = $72,000; Dividend paid common stock = $9,000.

Year 4: Dividend paid to cumulative preferred stock = $72,000; Dividend paid common stock = $48,000.

Explanation:

Year 1

Dividend distributed = $51,000

Cumulative preferred stock dividend payable = 60,000 * $60 * 2% = $72,000

Dividend paid to cumulative preferred stock = $51,000

Carried forward cumulative preferred stock dividend = $72,000 - $51,000 = $21,000

Dividend paid to common stock = 0

Year 2

Dividend distributed = $105,000

Year 2 cumulative preferred stock dividend due = 60,000 * $60 * 2% = $72,000

Cumulative preferred stock dividend payable = Due in year 2 + Carried down from year 1 = $72,000 + $21,000 = $93,000

Dividend paid to cumulative preferred stock = $93,000

Dividend paid to common stock = $105,000 - $93,000 = $12,000

Year 3

Dividend distributed = $81,000

Cumulative preferred stock dividend payable = 60,000 * $60 * 2% = $72,000

Dividend paid to cumulative preferred stock = $72,000

Dividend paid common stock = $81,000 - $72,000 = $9,000

Year 4

Dividend distributed = $120,000

Cumulative preferred stock dividend payable = 60,000 * $60 * 2% = $72,000

Dividend paid to cumulative preferred stock = $72,000

Dividend paid common stock = $120,000 - $72,000 = $48,000

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