Teak Outdoor Furniture Limited included the following shareholders' equity on its year-end balance sheet at February 28,

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Teak Outdoor Furniture Limited included the following shareholders' equity on its year-end balance sheet at February 28, 2020:image text in transcribed

{Requirements}
1. Identify the different issues of shares that Teak Outdoor Furniture Limited has outstanding.
2. Give the summary entries to record issuance of all the Teak shares. Assume that all the shares were issued for cash. Explanations are not required.
3. Suppose Teak did not pay its preferred dividends for three years. Would the company have to pay those dividends in arrears before paying dividends to the common shareholders? Give your reason.

4. What amount of preferred dividends must Teak declare and pay each year to avoid having preferred dividends in arrears?
5. Assume that preferred dividends are in arrears for 2019. Record the declaration of an \(\$ 800,000\) dividend on February 28, 2020. An explanation is not required.

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Financial Accounting

ISBN: 9780135433065

7th Canadian Edition

Authors: Walter Harrison, Wendy Tietz, C. Thomas, Greg Berberich, Catherine Seguin

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