Concept explainers
Computing dividends on preferred and common stock and journalizing
Learning Objective 4
1. Preferred Dividend 2018 $9,000
Northern Communications has the following
Stockholders' Equity Paid-ln Capital:Preferred Stock —5%, $11 Par Value; 150,000 shares authorized, 20,000 shares issued and outstanding $ 220,000 Common Stock—$2 Par Value; 575,000 shares authorized, 380,000 shares issued and outstanding 760,000 Paid-In Capital in Excess of Par—Common 680,000 Total Paid-In Capital 1,660,000Retained Earnings 200,000 Total Stockholders' Equity $ 1,860,000
Requirements
1. Assuming the preferred stock is cumulative, compute the amount of dividends to preferred stockholders and to common stockholders for 2018 and 2019 if total dividends are $9,000 in 2018 and $45,000 in 2019. Assume no changes in preferred stock and common stock in 2019.
2. Record the
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