Chapter 10, Problem 50AP

Accounting for cash dividends (Learning Objective 4) 15-20 min.

Kommeri Consulting, Inc., has 9,000 shares of $6, no-par preferred stock and 60,000 shares of no-par common stock outstanding for 2016-2018. Kommeri Consulting, Inc., declared and paid the following dividends during a three-year period: 2016, $22,000; 2017, $100,000; and 2018, $225,000.

Requirements

1. 1. Compute the total dividends to preferred stockholders and to common stockholders for each of the three years if
   1. a. preferred is noncumulative.
   2. b. preferred is cumulative.
2. 2. For requirement 1(b), journalize the declaration of the 2018 dividends on December 28, 2018. and the payment of the dividends on January 17, 2019. Use separate Dividends Payable accounts for preferred and common stock.