The preferred stock is noncumulative and is participating in distributions in excess of a 12% dividend rate on the common stock.(Round the rate of participation to 4 decimal places, e.g.1.4278. Round answers to O decimal place, e.g. 38,487.)$tAPreferredCommon Pharoah Holding's accounting records show the following balances on December 31, 2025:12% Preferred stock-$100 par value, outstanding 22,000 shares$2,200,000Common stock-$1 par value, outstanding 52,000 shares52,000Retained earnings1,780,000Assuming that the directors decide to declare total dividends in the amount of $560,000, determine how much each class of stockshould receive under each of the conditions stated below. One year's dividends are in arrears on the preferred stock.The preferred stock is cumulative and fully participating. (Round the rate of participation to 4 decimal places, e.g.1.4278. Roundanswers to O decimal place, e.g. 38,487.)$+APreferred$The preferred stock is noncumulative and nonparticipating. (Round answers to O decimal place, e.g. 38,487.)CommonPreferredCommon

The objective of the question is to calculate the amount of dividends each class of stock should receive under different conditions.First, let's calculate the dividends for the preferred stock. The preferred stock has a 12% dividend rate and a par value of $100. Therefore, the annual dividend per share is $100 * 12% = $12. With 22,000 shares outstanding, the total preferred dividends are $12 * 22,000 = $264,000.Next, let's consider the first condition where one year's dividends are in arrears on the preferred stock and the preferred stock is cumulative and fully participating. In this case, the preferred stockholders are entitled to their dividends in arrears plus the current year's dividends. Therefore, the total dividends for the preferred stock are $264,000 * 2 = $528,000. The remaining dividends of $560,000 - $528,000 = $32,000 are distributed to the common stockholders.Now, let's consider the second condition where the preferred stock is noncumulative and nonparticipating. In this case, the preferred stockholders are only entitled to the current year's dividends of $264,000. The remaining dividends of $560,000 - $264,000 = $296,000 are distributed to the common stockholders.Under the first condition where the preferred stock is cumulative and fully participating, the preferred stockholders receive $528,000 in dividends and the common stockholders receive $32,000. Under the second condition where the preferred stock is noncumulative and nonparticipating, the preferred stockholders receive $264,000 in dividends and the common stockholders receive $296,000.