Problem: Computing dividends on preferred and common stock
Fashonista Skincare has 10,000 shares of 3%, $20 par value preferred shares and 90,000 shares of $2 par ordinary shares outstanding. In a three-year time period, Fashionista announced and paid cash payouts as follows: 2010, $3,000; 2011, $13,000; and 2012, $17,000.
Requirements
• Calculate the total dividends to preferred and to common for each of the 3 years if
o preferred is noncumulative.
o preferred is cumulative.
• For requirement 1.b., journalize the declaration of the 2012 dividends on December 22, 2012, and payment on January 14, 2013. Use separate Dividends payable accounts for preferred and common.
The response must include a reference list. Using Times New Roman 12 pnt font, double-space, one-inch margins, and APA style of writing and citations.