It was early November 20X5, and the Hydromaint people requested a meeting with you and Tom Lockhart. They wished to brief you on several 20X5 events and strategy changes. Nick Riley reported that the maintenance business had grown significantly during 20X5, and that because they had the expertise in-house, the family had decided to take on the construction of a water treatment plant for a small town nearby.

Ray Ballard reported that the company had decided to give up their board seat with PVCO, effective January 1, 20X5, to concentrate on their new goal of manufacturing their own line of pumps, valves, and parts.

You asked Ray what interest he now had in the operation of PVCO. He responded that Hydromaint's influence was now nil over this privately held company. Although he had little or no contact with PVCO personnel, Hydromaint would continue to hold its stock as an investment.

Ray went on to say that the company had acquired the stock of a small manufacturer in the suburbs of St. Louis. The company was LS Pump/Value, Ltd. and was a family business. However, two aging sisters who held a 40 percent interest were interested in selling out. Two younger brothers (also with a 40 percent interest) are actively involved in managing the business and want to continue to do so. Their successful management of the growing business had caught the interest of Nick and Ray. They had known and respected the Santano brothers for years. Their product line was top quality and their company seemed to be well-respected in the industry. Because Luis and Carl Santano would remain with the company, the people at Hydromaint were very excited to become affiliated with LS-Pump/Valve.

This, of course, required financing. Jerry Loos reported that a NYSE dealer was successful in placing an issue of 5,600 shares of $100 par value, convertible preferred stock at $195 per share. Appropriate filings were made with the SEC and the State of Missouri, and the preferred stock was issued on March 1, 20X5. A total of 10,000 shares were authorized. The dividend rate is 6 percent, participating to 8 percent. The conversion rights call for common shares to be exchanged for the preferred shares on a share-for-share basis. The dealer absorbed the issue costs and recovered the profit margin on the sale to the public. The preferred stock has preference in involuntary liquidation to the extent of the issue price.

This stock issue provided a good portion of the financing needed to buy out the Santano sisters. The Santano sisters' stock was purchased on March 31, and Ray Ballard was named to the LS Pump/Valve board on the same date.

Of course, Coe & Lane was expected to continue to provide the independent audit. Jerry called you in mid-November with a problem. He indicated that Hydromaint's board had decided to declare a cash dividend of $50,000. Jerry was trying to figure out how to allocate the $50,000 among the preferred and common stockholders before the looming payment date.

Prepare a schedule for Jerry showing the appropriate allocation of the $50,000 dividend among the preferred and common shareholders.