Answer:
a. amount of dividends to be paid to the preferred shareholders and common shareholders.
preferred shareholders = $24,000
common shareholders = $524,000
b (1). general journal entries to record the declaration
<u>June 10</u>
Dividends - preferred shareholders SCE $24,000 (debit)
Dividends - common shareholders SCE $524,000 (debit)
Shareholders for Dividends SFP $548,000 (credit)
b (2). general journal entries to record the cash dividends
<u>July 1</u>
Shareholders for Dividends SFP $548,000 (credit)
Cash $548,000 (debit)
Explanation:
a. amount of dividends to be paid to the preferred shareholders and common shareholders.
preferred shareholders = 5,000 shares × $80 × 6% = $24,000
common shareholders = 131,000 shares × $4 = $524,000
b (1). general journal entries to record the declaration
<u>June 10</u>
Dividends - preferred shareholders SCE $24,000 (debit)
Dividends - common shareholders SCE $524,000 (debit)
Shareholders for Dividends SFP $548,000 (credit)
<em>Recognise Equity item - Dividends to the respective Equity Accounts and Recognise Liability - Shareholders for Dividends</em>
b (2). general journal entries to record the cash dividends
<u>July 1</u>
Shareholders for Dividends SFP $548,000 (credit)
Cash $548,000 (debit)
<em>De-recognise Liability - Shareholders for Dividends and De-recognise Cash Asset</em>
