Question: Computing dividends on preferred and common stock and journalizing Sunrise Communications has the following stockholders' equity on December 31, 2016:
Requirements: 1. Assuming the preferred stock is cumulative, compute the amount of dividends to preferred stockholders and to common stockholders for 2016 and 2017 if total dividends are $15,720 in 2016 and $53,000 in 2017. Assume no changes in preferred stock and common stock in 2017.
2. Record the journal entries for 2016, assuming that Sunrise Communications declared the dividend on December 1 for stockholders of record on December 10. Sunrise Communications paid the dividend on December 20.