Reference no: EM132894916
Question - Driver Inc. Partial Balance Sheet December 31, 2018
Shareholders' Equity
Contributed Capital:
Preferred shares, $1.50, cumulative, 100,000 shares authorized, 25,000 shares issued and outstanding - $200,000
Common shares, unlimited number of shares authorized, 70,000 shares issued and outstanding - 350,000
Total contributed capital - 550,000
Retained earnings - 270,000
Total shareholders' equity - $820,000
Assume that the preferred shares are cumulative and that there have been no dividends declared in 2016, 2017 and 2018. Driver Inc. declared a cash dividend of $185,000 on December 3, 2019 for shareholders on record January 31, 2020. Driver Inc. will pay the dividend on February 12, 2020.
Required -
a) Calculate the total amount of dividend for each class of shares and prepare the journal entries for each dividend date (no explanations required). Use separate dividends payable accounts for preferred and common shares. If no journal entry is required, indicate so on the appropriate date.
b) Using your solution from the previous question, indicate the dividend amount per share received by the common shareholders.