Dividends Per Share Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 24,000 shares of cumulative preferred 4% stock, $140 par, and 80,000 shares of $10 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $90,000; second year, $188,800; third year, $227,360; fourth year, $243,200. Required:
Compute the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places.

1st Year 2nd Year 3rd Year 4th Year
Preferred stock (dividend per share) $ $ $ $
Common stock (dividend per share) $ $ $ $

year 1:

preferred stock dividends = 24,000 x 140 x 4% = $134,400, but only $90,000 were distributed ($44,400 to be distributed next year). Dividends per preferred stock share = $90,000 / 24,000 = $3.75

common stocks dividends = no common stock dividends distributed

year 2:

preferred stock dividends = $134,400 for the current year and $44,400 form last year = $178,800. Dividends per preferred stock share = $174,800 / 24,000 = $7.45

common stocks dividends = ($188,800 - $178,800) / 80,000 common stocks = $0.125 per common stock

year 3:

preferred stock dividends = $134,400 / 24,000 = $5.60 per preferred stock.

common stocks dividends = ($227,360 - $134,400) / 80,000 = $1.162 per common stock

year 4:

preferred stock dividends = $134,400 / 24,000 = $5.60 per preferred stock.  

common stocks dividends = ($243,200 - $134,400) / 80,000 = $1.36 pe common stock

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