Reference no: EM132634565

Question -

Part I - FV Company earned net income of $75,000 during the year ended December 31, 2012. On December 15, FV declared the annual cash dividend on its 5% preferred stock (par value, $115,000) and a $0.50 per share cash dividend on its common stock (55,000 shares). FV then paid the dividends on January 4, 2013.

Requirements -

1. Journalize for FV:

2. Declaring the cash dividends on December 15, 2012.

3. Paying the cash dividends on January 4, 2013.

Part II - Topic: Dividing cash dividends

Partlow Company has the following stockholders' equity:

Paid-in-capital

Preferred stock, 5%,$15par, 7000 shares authorized, 5,500 shares issued. 82,500

Common stock, $0.30 par, 1,200,000 shares authorized and issued 360,000

Paid-in-capital in excess of par-common 400,000

Total paid in capital 842,500

Retained Earning 260,000

Total stockholder's Equity 1,102,500

Requirements:

1. Is Partlow's preferred stock cumulative or noncumulative? How can you tell?

2. Partlow declares cash dividends of $30,000 for 2010. How much of the dividends goes to preferred. How much goes to common?

3. Partlow passed the preferred dividend in 2011 and 2012. In 2013 the company declares cash dividends of $45,000. How much of the dividend goes to preferred? How much goes to common?