Accounting Assignment | College Homework Help

Sleep Corporation was organized on January 1, 2017. During its first year, the corporation issued 40,000 shares of $5 par value preferred stock and 400,000 shares of $1 par value common stock. At December 31, the company declared the following cash dividends:

2017                            $ 6,000

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2018                            $30,000

2019                            $60,000

Instructions

(a)   Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 4% and not cumulative.

(b)   Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 6% and cumulative.

(c)   Journalize the declaration of the cash dividend at December 31, 2019 using the assumption of part (b).