Knudsen Corporation was organized on January 1, 2019. During its fi rst year, the corporation issued 2,000 shares of $50 par value preferred stock and 100,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2019, $5,000; 2020, $12,000; and 2021, $28,000. Instructions a. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 6% and noncumulative. b. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 7% and cumulative. c. Journalize the declaration of the cash dividend at December 31, 2021, under part (b).
Knudsen Corporation was organized on January 1, 2019. During its fi rst year, the corporation issued 2,000 shares of $50 par value preferred stock and 100,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2019, $5,000; 2020, $12,000; and 2021, $28,000. Instructions a. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 6% and noncumulative. b. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 7% and cumulative. c. Journalize the declaration of the cash dividend at December 31, 2021, under part (b).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Knudsen Corporation was organized on January 1, 2019. During its fi rst year, the corporation issued 2,000 shares of $50 par value preferred stock and 100,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2019, $5,000; 2020, $12,000; and 2021, $28,000.
Instructions
a. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 6% and noncumulative.
b. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 7% and cumulative. c. Journalize the declaration of the cash dividend at December 31, 2021, under part (b).
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