Question Details

the declaration of the cash dividend



Sleep Corporation was organized on January 1, 2012. 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:

	2012	$  8,000
	2013	$30,000
	2014	$70,000

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.
(c)	Journalize the declaration of the cash dividend at December 31, 2014 using the assumption of part (b).





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