Reference no: EM133078593

Question - Best Security Inc. reports the following shareholders' equity on its balance sheet at December 31, 2020

Shareholders' Equity:

Preferred Shares:

Authorized 100,000 shares in each class:

$6 Cumulative Preferred Shares, 3,600 shares issued $ 36,000

$4 Cumulative Preferred Shares, 5,400 shares issued $ 48,600

Common Shares:

Authorized 90,000 shares, issued 45,000 shares $ 90,000

Retained earnings $ 522,000

Total Shareholders' Equity $ 696,600

Required -

1. What was the value at which the $4 Cumulative Preferred Shares were issued?

2. If Best Security was in arrears for any one year, what amount of dividends would be in arrears for that period?

3. Assume preferred dividends are in arrears for 2019. Record the journal entry for the declaration of a $130,000 cash dividend for on Dec 31/20, no description is needed.