The shareholders' equity of ILP Industries includes the items shown below. The board of directors of ILP declared cash dividends of $50 million, $90 million, and $290 million in its first three years of operation-2024, 2025, and 2026, respectively. Common stock Paid-in capital-excess of par, common Preferred stock, 8% Paid-in capital-excess of par, preferred ($ in millions) $ 240 1,120 900 695

Step 1: Define 'Dividends':

Step 2: (1) Determine the amount of dividends if preferred stock is cumulative and nonparticipating:

Step 3: (2) Determine the amount of dividends if preferred stock is non-cumulative and non-participating:

Solution