Reference no: EM133144791

Question -

a) Cloudy day Corporation has 55,000 $0.55 preferred shares and 625,000 common shares issued and outstanding. During a three-year period, Cloudy Day Corporation declared and paid cash dividends as follows: 2017, $0; 2018, $115,000; and 2019, $275,000.

Required -

1. Compute the total dividends to preferred shares and common shares for each of the three years if

a. preferred shares are noncumulative.

b. preferred shares are cumulative.

2. For requirement 1b, record the declaration of the 2019 dividends on December 22, 2019, and the payment of the dividends on January 12, 2020.

b) Assume Crown Wireless Inc. completed the following selected transactions during the year 2020:

May 19 Declared a cash dividend on the $10.00 preferred shares (7,500 shares outstanding). Declared a $2.80 per share cash dividend on the 550,000 common shares outstanding. The date of record was June 2, and the payment date was June 25.

Jun. 25 Paid the cash dividends.

Jul. 7 Split the company's 550,000 common shares 2 for 1; one new common share was issued for each old share held.

Aug. 29 Declared a 20 percent stock dividend on the common shares to holders of record on September 8, with distribution set for September 19. The market value was $37.00 per common share.

Sep. 19 Issued the stock dividend shares.

Nov. 6 Repurchased 5,000 shares of the company's own common shares at $45.00 per share. They had an average issue price of $31.00 per share.

Required - Record the transactions in the general journal.