Response to the following problem:
OnPoint Consulting, Inc., has 10,000 shares of $4.50, no-par preferred stock and 50,000 shares of no-par common stock outstanding. OnPoint declared and paid the following dividends during a three-year period: 20X1, $20,000; 20X2, $100,000; and 20X3, $200,000.
Required
1. Compute the total dividends to preferred stock and to common stock for each of the three years if
a. Preferred is noncumulative. b. Preferred is cumulative.
2. For case (1b), record the declaration of the 20X3 dividends on December 28, 20X3, and the payment of the dividends on January 17, 20X4. Use separate Dividends Payable accounts for Preferred and Common.