Perez Corporation was organized on January 1, 2009. During its first year, the corporation issued 2,000 shares of $50 par value preferred stock and 100,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2009, $6,000, 2010, $12,000, and 2011, $28,000.
Instructions
(a) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 7% and not cumulative.
(b) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 8% and cumulative.
(c) Journalize the declaration of the cash dividend at December 31, 2011, under part (b).