ACCO 112Ejercicios Taller 5 shares of nopar common stock iss

ACCO 112-Ejercicios Taller 5 shares of no-par common stock issued and outstanding The stock bas astated value of per share. During t r,t olloning occurned Apr. i Issued ss.ooo additional shares of common stock for $17 per share. June 15 Declared a cash dinidend of Ss per share to stockholders of record on June go July so Paid the $1 cash dividend Dec. 1 Issued 2,000 additional shares of common stock for Si9 per share s Declared a cash dividend on outstanding shares of $1.20 per share to stoekholders of record on December ga 2 -Timbe r Ridge Corporation was organized on January 1, 2018. During its first year, the corporation issued 40,000 shares of $5 par value preferred stock and 400,000 shares of $1 par value common stock. At December 31, the company declared the following cash dividends: $ 8,000 $30,000 $70,000 2018 2019 Instructions (a) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 5% and not cumulative (b) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 6% and cumulative.

Solution

ACCO 112) Journal Entries: Date Accounts Title Debit $ Credit $ 1-Apr Cash 935000 Common stock 275000 Paid in capital in excess of par 660000 Being common stock issued for cash 15-Jun Dividend 151000 Dividend payable 151000 (being dividend paid @ $1) 10-Jul Dividend payable 151000 Cash 151000 (being dividend paid to CS) 1-Dec Cash 38000 Common stock 10000 Paid in capital in excess of par 28000 Being common stock issued for cash 15-Dec Dividend 183600 153000*1.20 Dividend payable 183600 (being dividend paid @ $1.2) 2a) Allocation schedule: Year 2018 2019 2020 Total dividend 8000 30000 70000 Less: Pref dividend 10000 10000 10000 -2000 20000 60000 Less: Common dividend 0 20000 60000 Balance -2000 0 0 2b) Allocation schedule: Year 2018 2019 2020 Total dividend 8000 30000 70000 Less: Pref dividend 12000 12000 10000 Less: arrear -4000 4000 0 0 14000 60000 Less: Common dividend 0 14000 60000 Balance 0 0 0