The Annapolis Corporation's stockholders' equity accounts have the following balances as of January 1, 2018: 12% preferred stock, cumulative, $50 par (10,000 shares issued and outstanding) $500,000 Common stock, $10 par (100,000 shares issued and outstanding) 1,000,000 Additional paid-in capital: common 1,000,000 Retained earnings 3,750,000 Total stockholders' equity $6,250,000 Annapolis engaged in the following dividend transactions during 2018, 2019, and 2020: 2018: Dividends are in arrears for 2016 and 2017. On December 1, 2018, the annual cash dividend plus the dividends in arrears were declared on the preferred stock. In addition, a $1.50 per share dividend was declared on the common stock. The dividends were paid on December 31, 2018. 2019: On December 1, 2019, the annual cash dividend on the preferred stock was declared. The dividend was paid on December 31, 2019. On December 10, a 30% stock dividend was declared on the common stock, distributable on January 25, 2020. The market price per share for the common stock on December 10, 2019, was $28. 2020: On January 25, 2020, the stock dividend declared on December 10, 2019, was issued. On December 1, the annual cash dividend on the preferred stock was declared; it is payable on January 15, 2021. In addition, on December 1, a 10% stock dividend was declared on the common stock, distributable on January 20, 2021. The market price per share for the common stock on December 1, 2020, was $23. No other stock transactions took place during 2018, 2019, or 2020. Required: Prepare the entries to record the dividend transactions for 2018, 2019, and 2020. (Do not record any transactions for 2021.)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 67E: Cash Dividends on Common and Preferred Stock Lemon Inc. has the following information regarding its...

See similar textbooks

Related questions

Concept explainers

Question

The Annapolis Corporation's stockholders' equity accounts have the following balances as of January 1, 2018:


12% preferred stock, cumulative, $50 par (10,000 shares issued and outstanding)	$500,000
Common stock, $10 par (100,000 shares issued and outstanding)	1,000,000
Additional paid-in capital: common	1,000,000
Retained earnings	3,750,000
Total stockholders' equity	$6,250,000

Annapolis engaged in the following dividend transactions during 2018, 2019, and 2020:

2018:	Dividends are in arrears for 2016 and 2017. On December 1, 2018, the annual cash dividend plus the dividends in arrears were declared on the preferred stock. In addition, a $1.50 per share dividend was declared on the common stock. The dividends were paid on December 31, 2018.
2019:	On December 1, 2019, the annual cash dividend on the preferred stock was declared. The dividend was paid on December 31, 2019.
	On December 10, a 30% stock dividend was declared on the common stock, distributable on January 25, 2020. The market price per share for the common stock on December 10, 2019, was $28.
2020:	On January 25, 2020, the stock dividend declared on December 10, 2019, was issued.
	On December 1, the annual cash dividend on the preferred stock was declared; it is payable on January 15, 2021.
	In addition, on December 1, a 10% stock dividend was declared on the common stock, distributable on January 20, 2021. The market price per share for the common stock on December 1, 2020, was $23.

No other stock transactions took place during 2018, 2019, or 2020.

Required:

Prepare the entries to record the dividend transactions for 2018, 2019, and 2020. (Do not record any transactions for 2021.)

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions