Question

Krystal Consulting, Inc. has 13,000 shares of $4.00 preferred shares and 90,000 common shares outstanding. Krystal declared and paid the following dividends during a three-year period: 2012, $24,000; 2013, $115,000; and 2014, $230,000.
Requirements
1. Compute the total dividends to preferred shareholders and to common shareholders for each of the three years if
a. Preferred is noncumulative.
b. Preferred is cumulative.
2. For case 1(b), journalize the declaration of the 2014 dividends on December 28, 2014, and the payment of dividends on January 17, 2015.
Use separate Dividends Payable accounts for preferred and common shares.


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  • CreatedJuly 08, 2015
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