E15.9 (LO 1, 3) (Preferred Stock Entries and Dividends) Otis Thorpe Corporation has 10,000 shares of $100 par value, 8%, preferred stock and 50,000 shares of $10 par value common stock outstanding at December 31, 2020. Instructions Answer the questions in each of the following independent situations. a. If the preferred stock is cumulative and dividends were last paid on the preferred stock on December 31, 2017, (1) what are the dividends in arrears on December 31, 2020, and (2) how should these dividends be reported? b. If the preferred stock is convertible into seven shares of $10 par value common stock and 4,000 shares are converted, what entry is required for the conversion assuming the preferred stock was issued at par value? c. Ifthepreferredstockwasissuedat$107 pershare,howshould the preferredstockbereportedinthe stockholders' equity section?

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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E15.9 (LO 1, 3) (Preferred Stock Entries and Dividends) Otis Thorpe Corporation has 10,000 shares of $100 par value, 8 %, preferred stock and 50, 000 shares of $10 par value common stock
outstanding at December 31, 2020. Instructions Answer the questions in each of the following independent situations. a. If the preferred stock is cumulative and dividends were last paid on the
preferred stock on December 31, 2017, (1) what are the dividends in arrears on December 31, 2020, and (2) how should these dividends be reported? b. If the preferred stock is convertible into
seven shares of $10 par value common stock and 4,000 shares are converted, what entry is required for the conversion assuming the preferred stock was issued at par value? c.
Ifthepreferredstockwasissuedat$107 pershare,howshould the preferredstockbereportedinthe stockholders' equity section?
Transcribed Image Text:E15.9 (LO 1, 3) (Preferred Stock Entries and Dividends) Otis Thorpe Corporation has 10,000 shares of $100 par value, 8 %, preferred stock and 50, 000 shares of $10 par value common stock outstanding at December 31, 2020. Instructions Answer the questions in each of the following independent situations. a. If the preferred stock is cumulative and dividends were last paid on the preferred stock on December 31, 2017, (1) what are the dividends in arrears on December 31, 2020, and (2) how should these dividends be reported? b. If the preferred stock is convertible into seven shares of $10 par value common stock and 4,000 shares are converted, what entry is required for the conversion assuming the preferred stock was issued at par value? c. Ifthepreferredstockwasissuedat$107 pershare,howshould the preferredstockbereportedinthe stockholders' equity section?
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