The shareholders' equity of Deer Ltd. at the end of 2010 and 2009 appeared as follows:

During 2010, Deer paid a total of $125,000 in cash dividends. Required:
a. Assuming the preferred shares were not in arrears, how was the $125,000 in cash dividends distributed between the two classes of shares?
b. Assuming the preferred share dividends were in arrears for one year, how was the $125,000 in cash dividends distributed between the two classes of shares?
c. Both common shares and retained earnings changed during the year. Provide journal entries that would account for the changes.

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2010 2009 Share capital, preferred shares, no par $2 cumulative, 2,000.000 shares authorized 25,000 shares issued $200,000 200,000 Shune cupial me purshures authorized, 1,200,000 common shares issued (2009-1,000,000 shares) Retained earnings Total shareholders c 5,000,000 4,000,000 3,920,000 3,160,000 $9,120,000 $7,360,000