Problem 15-7 Your answer is partially correct. Try again. The books of Carla Corporation carried the following account balances as of December 31, 2017. Cash Preferred Stock (6% cumulative, nonparticipating, $50 par) 276,000 Common Stock (no-par value, 330,000 shares issued) Paid-in Capital in Excess of Par-Preferred Stock Treasury Stock (common 2,800 shares at cost) Retained Earnings $199,000 1,650,000 154,000 30,200 103,400 The company decided not to pay any dividends in 2017 The board of directors, at their annual meeting on December 21, 2018 declared the following: "The current year dividends shall be 6% on the preferred and $0.50 per share on the common. The dividends in arrears shall be paid by issuing 1,380 shares of treasury stock." At the date of declaration, the preferred is selling at $81 per share, and the common at $12 per share. Net income for 2018 is estimated at $72,400 (a) Prepare the journal entries required for the dividend declaration and payment, assuming that they occur simultaneously. (Credit account titles are automatically Indented when amount Is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to O decimal places, e.g. 3,487.) Debit Account Titles and Explanation For preferred dividends in arrears: 16560 Retained Earnings 16560 Preferred Stock 16560 Retained Earnings 16560 Common Stock Dividend Distributable For common share dividend: 137290 Retained Earnings 137290 Paid-in Capital in Excess of Par - Common Stock (b) Could Carla Corporation give the preferred stockholders 2 years' dividends and common stockholders a 50 cents per share dividend, all in cash? Yes