Blossom Corporation issued 110,000 shares of $20 par value, cumulative, 8% preferred stock on January 1, 2021, for $2,520,000.In December 2023, Blossom declared its first dividend of $750,000.(a)Your answer is correct.Prepare Blossom's journal entry to record the issuance of the preferred stock. (Credit account titles are automatically indentedwhen amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for theamounts.)Account Titles and ExplanationDebitCreditCash2520000Preferred Stock2200000Paid-in Capital in Excess of Par-Preferred Stock320000 (b)2 Your answer is incorrect.If the preferred stock is not cumulative, how much of the $750,000 would be paid to common stockholders?Common Stock Dividends$eTextbook and MediaList of AccountsSave for LaterAttempts: unlimitedSubmit Answer

Dividend arrears are paid for cumulative preferred stockholders. Dividend arrears are not paid for non-cumulative preferred stockholders. Annual preferred dividend = 110,000*$20*8% Annual preferred dividend = $176,000. Dividends are paid to common stockholders after the preferred stockholders are paid.a) b) Preferred stock dividend = $176,000 Dividend arrears are not paid for non-cumulative preferred stockholders. So, only one year preferred dividend is paid. Common stock dividends = $750,000 - $176,000 Common stock dividends = $574,000

Answered: (b) Your answer is incorrect. If the…

Business

Accounting

(b) Your answer is incorrect. If the preferred stock is not cumulative, how much of the $750,000 would be paid to common stockholders? Common Stock Dividends $

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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