Question - Salas Corporation was organized on January 1, 2016. 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: 2016, $5,000, 2017, $12,000, and 2018, $28,000.
Instructions -
(a) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 6% and not cumulative.
(b) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 7% and cumulative.
(c) Journalize the declaration of the cash dividend at December 31, 2018, under part (b).