Stock Transactions and Dividends
Response to the following problem:
Fowler Corporation was organized in January 2009. The state authorized 150,000 shares of no-par common stock and 50,000 shares of 12%, $8 par, preferred stock.
Record the following transactions that occurred in 2009:
a. Issued 28,000 shares of common stock at $32 per share.
b. Issued 15,000 shares of preferred stock for a piece of land appraised at $200,000.
c. Declared a cash dividend sufficient to meet the current-dividend preference on preferred stock and paid common shareholders $2 per share.
d. How would your answer to (c) change if the dividend declared were not sufficient to meet the current-dividend preference on preferred stock?