Reference no: EM132821367
Question - Shareholders' Equity Contributed Capital:Preferred shares, $0.50, 100,000 shares authorized, 30,000 shares issued $ 100,000
Common shares, unlimited number of shares authorized, 100,000 shares issued 350,000
Total contributed capital 450,000
Retained earnings 170,000
Total shareholders' equity $620,000
Required -
(A) Refer to the above. Assume that the preferred shares are cumulative and that there have been no dividends declared in 2011, 2012, 2013 and 2014. Prepare the journal entry to record the declaration and payment of a dividend in the total amount of $95,000, on December 3, 2015. Use separate dividends payable accounts for preferred and common shares.
(B) Refer to the above. Assume that the preferred shares are non-cumulative and that there have been no dividends declared in 2011, 2012, 2013 and 2014. Prepare the journal entry to record the declaration and payment of a dividend in the total amount of $95,000, on December 3, 2015. Use separate dividends payable accounts for preferred and common shares.