Reference no: EM132709353
Computing dividends on preferred and common stock
Fashonista Skincare has 10,000 shares of 3%, $20 par value preferred shares and 90,000 shares of $2 par ordinary shares outstanding. In a three-year time period, Fashionista announced and paid cash payouts as follows: 2010, $3,000; 2011, $13,000; and 2012, $17,000.
Requirements
Question 1: Calculate the total dividends to preferred and to common for each of the 3 years if
a. preferred is noncumulative.
b. preferred is cumulative.
Question 2: Journalize the declaration of the 2012 dividends on December 22, 2012, and payment on January 14, 2013. Use separate Dividends payable accounts for preferred and common.
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