E12-20 Northern Communications has the following stockholders’ equity:

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E12-20 Dividing dividends between preferred and common stock [10–15 min] 
Northern Communications has the following stockholders’ equity:

NORTHERN COMMUNICATIONS Stockholders’ Equity
	Paid-in Capital:
	Preferred stock, 6%, $11 par, 150,000 shares authorized
	20,000 shares issued and outstanding	$220,000
	Common stock, $3 par, 575,000 shares authorized
	400,000 shares issued and outstanding	1,200,000
	Paid-in capital in excess of par—common	1,000,000
	Total paid-in capital	2,420,000
	Retained earnings	190,000
	Total stockholders’ equity	$2,610,000

Requirements

1. First, determine whether preferred stock is cumulative or noncumulative.

2. Compute the amount of dividends to preferred and to common for 2011 and
2012 if total dividends are $12,200 in 2011 and $55,000 in 2012.

3. What is the average price at which each preferred share sold for? What is the average price at which each common share sold for?