Orlov Company has shares outstanding as follows: Common, no par value, 150,000 shares outstanding, $1,150,000; Preferred, $6,

Question:

Orlov Company has shares outstanding as follows:
Common, no par value, 150,000 shares outstanding, $1,150,000;
Preferred, $6, no par value, 5,000 shares outstanding, $500,000.
The Preferred is cumulative and participating up to an additional 4%; two years are in arrears (not including the current year); and the total amount of cash dividends declared for both shares classes is $240,000.
Instructions
Prepare the entry for the declaration, separating the into the common and preferred portions. Show all calculations.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...